The land bid prices of the first two state tenders after recent cooling measures announced on Tuesday shows that although lands are in demand among developers, they are taking more careful steps.
Reports reveal that eight bidders fought for a plot of land with 99-year lease at Jalan Tembusu which is near East Coast. Developers’ keen interests in this property have created a very high land rates GLS that are situated in the city fringe. The other residential plot at Lentor Hills near Yio Chu Kang area, had only manage to attract four bidders.
For the Jalan Tembusu site, renowned developer, City Developments (CDL) was announced as the top bidder with the proposed amount of $768 million which turns out to be $1302 per square foot per plot ratio. Note that, this is very high when compared to another upcoming city fringe development. Northumberland Road site that had a previous record of $1129 per square feet per plot ratio. The chief executive of the CDL group recently said in an interview that this Jalan Tembusy site can provide a huge inventory of more than 600 units to the company. Although there is going to be some deterrence on this upcoming new launch condo due to ongoing cooling measures, the CDL group still believes that market conditions will be supported by a potential household balance sheet and a growing job market.
Earlier, CDL mentioned that if the company receives the award, they may design a residential project with up to 640 residential apartments and comprises 4 blocks of 20-21 storeys each. This project is expected to have an awesome sea-facing design with an unobstructed view of Singapore Sports Hub and CBD Skyline. Reports reveal that the bid placed by CDL was almost 8% above the second-highest bid of $712.6 million. However, the winning bid amount is around 67% more when compared to the lowest bid in the list which was $460 million only. Chances are that many developers adjusted their property bids due to the recent cooling measures implemented in the country.
On the other side, the site located near Lentor Hills Road received the top bid of $586.6 million which comes out to be $1060 psf ppr. The winning bid made by the consortium is almost 5.2% lower when compared to the Ang Mo Kio Avenue 1 GLS site that had a land rate of approximately $1118 psf ppr in the month of June last year. This amount is again less than the nearby Lentor Central Site that received the psf ppr price of $1204. The interesting point is that the developer has already worked on TID residential, Intrepid Investments, and GuocoLand Singapore. From these observations, it can be stated that this developer is keen enough to develop Lentor Estate even after the changing cooling measures.
Analysis shows that the investors are more interested to bid for the most attractive and profitable sites; however, the less attractive ones are likely to receive a measured response in the current market.