KepLand's top bid sets new high for housing land

SINGAPORE - A new high has been set for 99-year private housing land offered at a state tender.

The $1,162.86 per square foot per plot ratio (psf ppr) top bid from Keppel Land unit Harvestland Development for a plum site in Kim Tian Road was above expectations.

It also surpassed the previous high of $1,107.80 psf ppr that Far East Organisation paid last August for a small plot next to Lutheran Towers along Farrer Road.

KepLand topped Thursday's tender for the plot near Tiong Bahru MRT Station and Tiong Bahru Plaza with a $550.28 million bid. This was 7.2 per cent more than the $513.33 million or $1,084.78 psf ppr from a Far East group-Sekisui partnership. The third highest bid, from a City Developments-led consortium, was $1,016.67 psf ppr. There were 11 bids in all.

Noting that the top three bids were above $1,000 psf ppr, SLP International executive director Nicholas Mak said that "some developers are still very bullish on the middle-high-end residential market segment, especially if there is limited new supply in that location".

KepLand's bid was 3.86 times what MCL Land paid for the previous 99-year private housing site sold by the state in the vicinity a decade ago - in March 2003. MCL paid $301 psf ppr for its site, which it has since developed into the MeraPrime condo. That tender had drawn 12 bids.

For the Kim Tian plot, property consultants had predicted bids of about $850-950 psf ppr when it was launched in late-February by the Urban Redevelopment Authority (URA).

CBRE associate director Desmond Sim notes that the site's proximity to the Tiong Bahru MRT station and established amenities outweighed the site's building restrictions.

These include maximum heights of 25, 30 and 40 storeys for different sections of the site and a maximum of 500 homes due to traffic issues in the locality. There is also a requirement for a basement carpark, which is more costly compared with a multi-storey carpark.

Market watchers' estimates of KepLand's breakeven cost range from $1,660 psf to $1,800 psf, with some suggesting that the group could be looking at an average selling price of around $2,000 psf.

They see KepLand taking the cue from Echelon, located near Redhill MRT Station, one stop away. Echelon's developer, City Developments, sold units at median prices of $1,836 psf and $1,832 psf in March and February respectively, according to URA data.

Meanwhile, the 500 homes stipulated for the Kim Tian project implies an average unit size of around 946 sq ft. Assuming a price of $2,000 psf, the average unit in the development would be priced around $1.9 million. This would be on the high side for a condo outside the Core Central Region that is targeted at the HDB upgrader market.

Still, Mr Sim argues that KepLand might be right in being optimistic, given the relatively high prices for HDB resale flats in the vicinity.

According to PropNex Realty CEO Mohamed Ismail, sellers of five-room HDB flats on high floors in the Kim Tian location are asking for well above $900,000. "For executive flats at Queenstown, two MRT stops away, sellers are asking for $1 million," he added.

KepLand president (Singapore) Tan Swee Yiow said: "We are confident that we will see positive demand from homeowners who aspire to own a top quality home in the CBD's fringe. . . Tiong Bahru is an established residential estate which is well-connected by public transportation and well-served by a wide range of facilities and amenities."

The Kim Tian site, in addition to being a stone's throw away from Tiong Bahru MRT Station on the East-West Line, will be 500 metres from the planned Havelock Station on the Thomson Line.

KepLand envisages a project with about 500 homes ranging from 500 sq ft to 1,350 sq ft in one to four-bedroom configurations.

"A wide range of shopping, dining and leisure amenities are a stone's throw away at Tiong Bahru Plaza, Tiong Bahru Food Centre, Tiong Bahru Conservation Area and Great World City," the group said.

Other bidders at yesterday's tender included CapitaLand unit Areca Investment which offered $993.42 psf ppr. Placing an identical bid was a tie-up between UOL Venture Investments and Kheng Leong Co.

Low Keng Huat partnered Sun Venture Homes for a $953.06 psf ppr bid. Wing Tai and Metro teamed up to bid $944.37 psf ppr. Frasers Centrepoint unit FCL Place bid $930 psf ppr.

Placing the lowest bid was Asset Legend, at $608.21 psf ppr.

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