Attractive Siglap condo site pulls in 8 bids

A RARE Siglap Road condo site attracted eight bids yesterday, testimony to the area's merits and need for developers to replenish land banks.

The bids may also indicate that property firms believe "prices in the East Coast mid-tier segment may be reaching the bottom and could recover come 2017", said Nicholas Mak, SLP International executive director.

The top four bids were all above $800 per sq ft per plot ratio (psf/pr) and fell within a 7 per cent margin - suggesting a shared bullish outlook in demand for units at the site, said Ong Teck Hui, JLL national research director.

A consortium of Frasers Centrepoint unit FCL Topaz, Sekisui House and Keong Hong Holdings unit KH Capital lodged the top offer of $624.18 million, or about $858 psf/pr.

The 207,847 sq ft parcel, in between Victoria School and the East Coast Parkway, can yield about 750 private homes.

Based on the top bid, the selling price for a project on the site would have to be at least in the range of $1,400 to $1,500 psf, Mr Ong noted.

"That would require favourable market conditions at the time of sales launch."

The lack of residential development sites could also have contributed to the strong turnout. "In the absence of many development options, those with the financial muscle were prepared to bid competitively in spite of the high absolute land price," added Mr Ong.

Experts also pointed to the site's proximity to amenities at East Coast Park and Katong and promise of sea views.

There are few new projects in the area. The last time a nearby site was sold was in 2001 - home to the current Cote D'Azur condo, said Desmond Sim, CBRE research head for Singapore and South-east Asia. That condo was also developed by Frasers Centrepoint Homes.

Other high bids were submitted by joint ventures involving major players, unsurprising given the nearly $1 billion quantum involved if development costs are included, Mr Sim added.

He added that the recent trigger of a condo site in Tanah Merah could have distracted some smaller players. The Tanah Merah reserve parcel will be up for sale soon as a developer committed to a minimum bid of $320 million or about $580 psf/pr - a far more pocket-friendly sum.

wrennie@sph.com.sg

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