$262m bid for housing site in Sengkang

SINGAPORE - A residential site at Sengkang West Way overlooking Punggol River has received an unexpectedly bullish top bid of $262.1 million in an eight-way contest which closed on Thursday.

The highest bid, which translates to about $489 per square foot (psf) per plot ratio (ppr) for the 178,723 sq ft plot, came from UOL Group's vehicle Secure Development.

The 99-year leasehold site is set to yield an estimated 555 units.

This was one of the first land tenders launched after the seventh round of cooling measures took effect on Jan 12 this year.

Analysts say this means it is a good indicator of the upbeat sentiment among developers.

The top bid exceeded analysts' expectations of $214 million to $241 million, or $400 to $450 psf ppr. The number of bids, at eight, was also at the top end of the four to eight that analysts had tipped.

Mr Liam Wee Sin, president of UOL's property division, said in a statement on Thursday that the site "has the potential to tap the upgrader demand in the north and north-east of Singapore".

He added that UOL intends to turn the site into a 20-storey development of about 600 residential units with a river fronting.

UOL's bid was 3.4 per cent more than the next highest bid of nearly $253.55 million or about $473 psf ppr from Bayfront Land, a joint venture between Fragrance Group and World Class Land.

"Despite tighter rules against purchases by foreigners, permanent residents and local investors, interest in some recently launched projects has been encouraging and this observation would have led to many developers reading the market outlook positively," said Jones Lang LaSalle national director of research and consultancy Ong Teck Hui.

The lowest bid was from CapitaLand unit Athens Residential Development at $110.99 million.

CBRE Research associate director Desmond Sim said the healthy level of interest pointed to developers' need to replenish their land banks, and said the tender results showed that developers remain positive about the residential market.

Mr Sim put the break-even cost at about $900 psf and said the project would likely be launched at about $1,000 psf given its proximity to the future The Seletar Mall and Sengkang Riverside Park.

The site is next to Punggol River and close to Fernvale and Layar LRT stations, and can be turned into a condominium or flats, or a combination of flats and strata landed houses with prior written approval. Serviced apartments are not allowed.

melissat@sph.com.sg

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