Sengkang bids signal moderation setting in
But 10 bids suggest hunger for land intact; CDL tops with $365 psf ppr
By KALPANA RASHIWALA
THE government's move to turn on the supply tap for private residential land appears to be having an effect on developers' bids, property consultants said after the tender for a 99-year leasehold private condo plot in Sengkang closed yesterday.
The site, next to Sungei Punggol and in front of an LRT station, still drew a considerable 10 bids, suggesting that developers remain hungry for land, especially in the hot-selling mass-market segment.
The top bid by a City Developments Ltd (CDL) subsidiary - $200.5 million or $365.26 per square foot of potential gross floor area - was some 13 per cent higher than the next highest offer of about $322 psf ppr by a Far East Organization unit.
However, CDL's price was lower than the top range of bids, of up to $420 psf per plot ratio (psf ppr), that had been predicted by some consultants in late December, when the government announced that the plot had been triggered from its reserve list.
'We're probably moving to a more stable market. Developers are becoming more realistic; the government this week reiterated that there is sufficient supply from its Government Land Sales (GLS) Programme for first half 2010,' said CB Richard Ellis executive director Li Hiaw Ho.
The Urban Redevelopment Authority stressed that the number of private homes from the confirmed and reserve lists in the H1 2010 GLS Programme - 10,550 - is the highest in the programme's history.
Commenting on the outcome of yesterday's tender, Knight Frank chairman Tan Tiong Cheng said: 'Developers are still trying to secure mass-market housing land as shown by the number of bids but this time, at more sensible prices.'
Colliers International director Tay Huey Ying described the top bid as 'relatively realistic optimism on the part of developers' compared with market expectations as well as achievable selling prices for the project in about a year's time when it is likely to be launched.
Consultants estimate that based on CDL's bid, its breakeven cost could be about $650-760 psf and its target selling price around $750-830 psf. This price range is still higher than current prices in the area cited by consultants.
A CDL spokeswoman said that the plot, at the corner of Sengkang West Avenue and Fernvalue Link, is well positioned, directly in front of Layar LRT Station. If awarded the site, CDL, which is part of the Hong Leong Group, plans to build a 24 to 25-storey condo.
'This bid is in line with CDL's continued strategy to build value into, and replenish its landbank,' she added.
Assuming CDL is awarded the plot, it would mean that the Hong Leong group has clinched three out of the seven state plots (with private housing element) whose tenders have closed in the past six months.
Yesterday's tender, conducted by the Housing & Development Board, also drew bids from Frasers Centrepoint (about $322 psf ppr), Chip Eng Seng, Allgreen Properties and GuocoLand, among others.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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