Developers continue to be hungry for land.
A state tender on Tuesday for a 99-year leasehold private housing site along Fernvale Road in the Sengkang area beat earlier market projections. It garnered 14 bids with the top bid at S$287.1 million or S$517.03 per square foot per plot ratio.
Bidding was competitive, with the top bid coming in just 0.005 per cent higher than the second highest bid - one of the keenest at a Government Land Sales (GLS) tender, according to SLP International executive director Nicholas Mak.
When the 1.7-hectare site was launched last month, property consultants polled by The Business Times had generally predicted five to 10 bids for the site, with top bids expected to come in at S$440-490 psf ppr.
The top bid at Tuesday's tender - from a Sing Holdings-Wee Hur partnership - was about 17 per cent higher than the price paid about two years ago for the neighbouring High Park Residences land parcels, noted JLL national director Ong Teck Hui.
At a state tender that closed in August 2014, a joint venture between Chip Eng Seng, KSH Holdings and Heeton Holdings clinched two adjoining sites on which they are developing High Park Residences, at S$438 psf ppr and S$448 psf ppr; the plots drew just four bids and three bids respectively. Market watchers credited the strong turnout and optimistic bids at the latest tender to the previous success of High Park Residences in addition to the general scarcity of private housing sites at state land tenders.
"High Park Residences has sold 98 per cent of its units based on August sales data at an average price of S$990 psf," said Mr Ong.
"The higher bid for the subject site indicates that the units may be sold at a slightly higher price than High Park Residences, which will probably still find demand from buyers, given the rapid take-up at High Park Residences and against the possible backdrop of an improved market."
Competition was stiff among the top few bidders at the tender.
The second highest bid at Tuesday's tender came from China Construction (South Pacific) Development Co, which offered nearly S$287.09 million or S$517.00 psf ppr for the site.
Robert Kuok's Allgreen Properties was the third highest bidder, at S$286.9 million or S$516.67 psf ppr.
CBRE Research's head of Singapore & South East Asia Desmond Sim said: "The top three bids are extremely close (between 0.07 per cent separating the top and third bids); this is an indication that these bidders share similar views on pricing of the projects as well as construction costs control.
"Being able to control costs is a major factor particularly for the top two bidders as they are developers with a construction arm and would have come to terms with the costs associated with the PPVC (prefabricated prefinished volumetric construction) projects."
The project on the site is to be built using this high-productivity construction method.
When contacted, Sing Holdings CEO Lee Sze Hao was elated with the narrow winning margin. He told BT that Sing Holdings and Wee Hur will have a 70:30 partnership for developing the project in addition to Wee Hur handling the contruction. He declined to disclose the likely breakeven cost but some analysts estimate the figure at around S$950 psf. If awarded the site, "we hope to launch the project by the fourth quarter of next year", Mr Lee said.
Mr Mak of SLP estimates that the new condominium could be launched at above S$1,100 psf from late-2017 to early-2018.
Mr Lee said: "We are comfortable with our bid price and confident that it will be a good project in view of the amenities and attributes." The site is near Thanggam LRT Station, which is just four stops from Sengkang LRT/MRT stations, bus interchange and Compass One mall.
Jalan Kayu and its eateries are also nearby. Thanggam Station is also just an LRT stop from The Seletar Mall and Fernvale Point."
Sing Holdings and Wee Hur's proposed scheme for the site will have about 700 apartments, of which half will be one and two-bedders and the other half comprising three and four-bedders. The large site area allows "full facilities" including a 50-metre lap pool, a tennis court, gym and clubhouse, he added. As part of tender conditions the successful tenderer will have to include a childcare facility (which will be open to the public) as well as a public park.
The site is also near Sengkang Green Primary School, Sengkang Riverside Park and Sengkang Sports Complex. Foreigners working for big companies at Seletar Aerospace Park could provide rental demand for apartments in the proposed project, which will also appeal to those who want to acquire the units for investment, said Mr Lee.
Sing Holdings' last two Singapore residential developments were Robin Residences in the Bukit Timah area and Waterwoods, an executive condominium project in Punggol. Both projects obtained their respective Temporary Occupation Permits in December 2015.
This article was first published on September 28, 2016.
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