Geylang site triggered for sale

PHOTO: Geylang site triggered for sale

A Small residential site in Geylang East Avenue 1, near Aljunied MRT station and set to benefit from the rejuvenation of nearby Paya Lebar, is about to be put up for sale.

The sale process was triggered after an unnamed developer lodged an offer acceptable under the reserve list of the Government Land Sales Programme. The 99-year leasehold site will likely go to tender before the end of the month.

The unnamed developer said it would bid at least $95 million for the 67,146 sq ft land parcel.

This comes after a rather bullish run for public tenders. For instance, recent tenders for two adjacent private residential plots in Upper Serangoon View each attracted eight bidders.

Developers appear keen to replenish land banks, even with private home sales and prices slowing down.

Despite the small size of the Geylang plot, said OrangeTee research head Christine Li, one reason the sale was triggered was because "many smaller players are running low on land bank".

The site has a maximum permissible gross floor area of 188,013 sq ft.

It is near the Geylang East Public Library and also within walking distance of Aljunied MRT station.

The land parcel was made available for sale through the reserve list system on May 15, said the Urban Redevelopment Authority (URA).

The minimum bid of $95 million works out to about $505 per sq ft per plot ratio (psf ppr).

R'ST Research director Ong Kah Seng said: "The rejuvenation of Paya Lebar into a business hub will spill over to surrounding areas in the east and this corner of Aljunied has fairly limited private homes."

He expects about five bids for the public tender, with the top bid to come in at $580 to $630 psf ppr, saying it will be moderate "due to implementation of the TDSR (total debt servicing ratio), which effectively restricts buyers from obtaining large loans".

Ms Li expects top bids in the region of $600 to $650 psf ppr.

She said "the reputation of the surrounding areas could be one of the biggest challenges in attracting optimistic bids from developers", referring to the nightlife nearby.

The URA will launch the public tender for the site in about two weeks. The tender period will be about four to six weeks.

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