Tampines Ave 10 site sees 10-way bidding war

SINGAPORE - A fiercely-fought tender involving 10 developers for a plot at Tampines Avenue 10 has stunned the market at its close on Tuesday, with a top bid of $289.7 million.

Analysts said that the competition for the 17,102.9 sq m plot was unexpected given the new rules to prevent borrowers looking to sign new mortgages from over-extending themselves.

The top bid for the plot designated for residential development was from Chinese developer MCC Land, whose bid translates into a price of $562 per sq ft (psf) per plot ratio (ppr).

This was 7.6 per cent more than the next highest bid submitted by a tie-up between UOL Venture Investments and Kheng Leong Company - at $522 psf ppr.

Jones Lang LaSalle's national director of research and consultancy Ong Teck Hui said that the top bid for the 99-year leasehold site was "way above expectations".

He noted that that it was 34 per cent higher than an adjacent site sold in May last year, where Far East Organisation's Q Bay is now being built.

The tender outcome indicated that developers remain confident of underlying robust demand, despite the latest lending rules imposed by the Monetary Authority of Singapore, Mr Ong added.

"In terms of the number of bidders participating in the tender, it's a vast improvement from the Q Bay site, where only three bidders participated," said OrangeTee's head of research and consultancy Christine Li.

Ms Li said developers may have been swayed to throw in high bids by the overwhelming demand for J Gateway in Jurong East last month, where 99 per cent of the units there were sold on the first day of its launch.

Analysts also said that MCC Land was determined to secure the plot as it plans to diversify from the northern region, where most of its residential projects are located. The plot is near Temasek Polytechnic, the Tampines Regional Centre and the upcoming Tampines West MRT station. It is expected to yield 530 units.

The estimated breakeven price is expected to be between $940 psf and $990 psf, and MCC Land might launch its project at a price above $1,100 psf, said SLP International's executive director Nicholas Mak.

ERA's key executive officer Eugene Lim expects demand for the upcoming development from MCC Land to come mainly from first-time home buyers as this segment is unaffected by the new MAS rules.

The tender was previously scheduled to close on July 2, but was extended until Tuesday.

ocheryl@sph.com.sg

Get a copy of The Straits Times or go to straitstimes.com for more stories.