Firm's bid for Upper Thomson plot puts others in the shade
Afternoon sun may pose a challenge in designing project, observers say
A COMPANY unknown in local developer circles has placed the top bid for a plum 99-year leasehold condo plot at Upper Thomson Road. Treasure Well Investments bid about $251.3 million. This works out to $533.34 per square foot of potential gross floor area - which was above expectations and the highest unit land price seen at a state land tender this year.
The top bid also surpassed by 21.5 per cent the next highest offer of $438.83 per square foot per plot ratio (psf ppr) placed at yesterday's tender by a unit of Singapore's Far East Organization.
There is much speculation about Treasure Wells Investments, with some linking it to top China and Hong Kong developers, including possibly Hong Kong tycoon Li Ka-shing's Cheung Kong group, which is familiar with the Singapore property market.
The tender attracted just six bids in total - about half the 12 to 15 bids received for each of the other four reserve list sites that were tendered out by the government in the past few months. 'Possibly, developers are waiting to see how much land government is releasing for its first half 2010 programme before deciding to bid for sites,' said Knight Frank chairman Tan Tiong Cheng.
Colliers International executive director (investment sales) Ho Eng Joo reckons that the thinning out of sales that developers saw last month at their showflats may also have led some of them to stay away from yesterday's tender.
Real estate lecturer Nicholas Mak too reckons that developers might be saving their bullets for the H1 2010 government land sales programme.
As for the wide margin between the top two bidders for the latest Upper Thomson Road site yesterday, Knight Frank's Mr Tan suggests that local developers familiar with the site would know its constraints. 'Hence you find that other than the top bid, the rest of the bids were not that aggressive.'
The site boasts a good location opposite the Singapore Island Country Club's Island Golf Course and Lower Peirce Reservoir.
However, the site's best view faces the west - and the afternoon sun. 'It will be difficult to design a project when you have the afternoon sun. You can do double glazing and other things but orientation will be a challenge,' Mr Tan said.
Analysts generally estimate that the top bid reflects a breakeven cost of about $850-900 psf and that the bidder would be eyeing selling prices of about $1,000 psf on average.
UOL is selling the Meadows @ Peirce condo, also on Upper Thomson Road, at about $900 psf on average. The project is freehold but the latest plot has a superior location and is closer to town.
Property consultants polled by BT in September when the government announced that an unnamed developer had made a successful application for the reserve list site had predicted that it would fetch bids ranging from $300 psf ppr to $425 psf ppr at tender.
A developer who did not take part in yesterday's tender said that Far East's bid of $439 psf ppr was more realistic, translating to a breakeven cost of about $800-820 psf.
The other developers that took part in yesterday's tender were Sim Lian Land ($190.5 million or $404.24 psf ppr), Frasers Centrepoint ($165.08 million or $350.30 psf ppr), Chip Eng Seng unit CEL Development ($150 million or $318.30 psf ppr) and GuocoLand's First Changi Development ($135 million or $286.47 psf ppr).
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
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