A partnership between First Shine Properties and Meadows Bright Development has placed the top bid for a 99-year-leasehold private housing site on Dairy Farm Road.
Their bid of nearly S$244.32 million works out to S$616 per sq ft per plot ratio (psf ppr), ahead of earlier market expectations since the launch of the site in July.
The top bid was 9.9 per cent higher than the next highest bid of S$560.49 psf ppr from UOL Group unit Secure Development.
The tender attracted nine bids in all, with the lowest from a partnership between Capital Development and ZACD Investments at just under S$420 psf ppr.
First Shine Properties is a fully owned unit of mainboard-listed Hock Lian Seng Holdings, which is involved in civil engineering, property development and investment.
Meadows Bright has three shareholders, namely Sino Holdings (S'pore), King Wan Development and Far East Distillers. Sino Holdings is a unit of TA Corporation, which is involved in property and construction and was listed on the mainboard late last year.
Based on the top bid, property consultants' estimates of the breakeven cost for a new condo project range from $950 to $1,100 psf, and the likely average selling price at S$1,200 to S$1,300 psf.
The Urban Redevelopment Authority had postponed the close of the tender for the site by a week to give potential bidders more time to do their sums following this month's introduction of a development control guideline which stipulates that the maximum number of units in non-landed private housing projects outside the central area will be capped based on an average area of 70 sq m. Going by the formula, the Dairy Farm Road site can be developed into no more than 526 units.
The 188,861.2-sq-ft site on Dairy Farm Road has a maximum gross floor area (GFA) of 396,617.4 sq ft and a maximum building height of part five storeys and part 15 storeys, subject to 140 m above mean sea level.
Property consultants noted that yesterday's top bid was 3.5 per cent lower than the $638 psf ppr that the nearby Hillview Avenue site fetched in March.
Colliers International's director of research and advisory Chia Siew Chuin said the lower psf ppr price for the latest plot could have been influenced by the new guideline.
However, DWG's senior manager Lee Sze Teck said yesterday's top bid was above market expectations and that the nine bids received reflected enthusiastic participation on account of the site's attractiveness.
"This could mean that the government's guidelines have limited impact on the market as developers can find innovative ways to comply with it - such as by selling more loft space, more private enclosed space or a roof terrace - and yet maintain their profits." He added that the wide disparity in terms of a nearly 47 per cent gap between the top and lowest bids at tuesday's tender could be due to developers grappling with the new guidelines.
Jones Lang LaSalle's national director for research Ong Teck Hui said: "Residential sites in the Bukit Timah area released under the Government Land Sales Programme in the past two years have attracted many bidders, so it's not surprising to find nine parties vying for this site. This is partly due to the attraction of the Bukit Timah address, as well as there being relatively fewer projects in this area than, say, in the east and north-east."
The latest site is about 600 m from the future Hillview MRT Station on the Downtown Line.
SLP International executive director Nicholas Mak said: "The number of bids received and the relatively bullish top bid indicate that some developers expect private property prices to continue to expand, which could be partly contributed by the QE3 announced by the US Federal Reserve."
Others who bid at yesterday's tender include Han Chee Juan's Teneriffe Development (S$550 psf ppr), a Hong Leong Holdings-City Developments partnership ($507.35 psf ppr) and a Fragrance-Aspial tie-up (S$467.52 psf ppr).
Sim Lian Land offered S$461.40 psf ppr. Far East Orchard Limited joined forces with Frasers Centrepoint to bid S$456.81 psf ppr.