Qingjian submits aggressive $301.16m bid for Bukit Batok West site

Singapore - Chinese developer Qingjian Realty seems to be on a roll. Fresh from clinching the Shunfu Ville en-bloc sale site in the Marymount area last week, it topped bids at Tuesday's state tender closing for a commercial-and-residential site in Bukit Batok West.

Its top bid of S$301.16 million or S$634.57 per square foot per plot ratio (psf ppr) was 8.3 per cent more than the next highest bid of S$277.98 million (S$585.73 psf ppr) from Robert Kuok's Allgreen Properties.

JLL national director Ong Teck Hui said this reflects "Qingjian's earnestness in securing the site by bidding more competitively than the rest".

The tender for the 1.5-hectare, 99-year leasehold land parcel in Bukit Batok West Avenue 6 drew 11 bids - considered a strong participation rate. Some consultants attributed this interest to the recent pick-up in developers' new-home sales.

As well, mixed-development projects tend to be well sought after by home buyers.

Desmond Sim, CBRE Research's head of Singapore and South-east Asia, said the overall cutback in state land sales and the dearth of land parcels for sale in the area gave developers additional reasons to bid for this site.

Qingjian Realty (South Pacific) Group's general manager Li Jun said one attraction was the site's proximity to the Jurong district, where the government has "exciting and progressive development plans".

The Business Times' check with www.onemap.sg showed that the site along Bukit Batok West Avenue 6 is at least 1.8 km from the Jurong Lake District and even further away from the Jurong Innovation District.

When the plot was launched in late March, property consultants had forecast that the top bid would range from S$520 to S$620 psf ppr, and expected the site to garner five to 10 bids.

The site is in a less-developed locale of Bukit Batok and not within walking distance of any MRT station.

Apart from Qingjian, the rest of the bidders at Tuesday's tender were relatively measured, "probably still mindful of the risks as the market remains challenging", noted Mr Ong.

City Developments and Hong Leong Holdings teamed up to offer nearly S$542 psf ppr for the parcel. GuocoLand priced the site at S$533 psf ppr; Chip Eng Seng, an experienced construction and property group, came in with a S$440 psf ppr offer.

Low Keng Huat bid S$411 psf ppr, which put Sim Lian Land at the bottom of the tender results table, with its bid of S$396 psf ppr.

Mr Li said Qingjian Realty expects to build a condo of about 500 units and a one-storey mall. The condo is likely to be launched for sale in a year.

Qingjian Group, which will handle the project's construction, said that this would be Qingjian Realty's first mixed-development project in Singapore.

Mr Ong of JLL expects that the launch price for the condo will be around S$1,100 psf on average.

The Urban Redevelopment Authority (URA) has stipulated the pre-fabricated pre-finished volumetric construction (PPVC) method for the residential component; this method, aimed at boosting productivity, costs more.

The URA has also stipulated a maximum 44,091 sq m (474,591 sq ft) gross floor area (GFA) for the project on the site; of this, the maximum commercial component will be 6,000 sq m (including a supermarket of at least 1,000 sq m and a food court of at least 500 sq m).

The commercial space has to be held in a single strata lot, that is, strata subdivision is not allowed.

In addition, the developer will have to build a child-care centre of at least 500 sq m, which is to form part of the development's common property.

This article was first published on May 25, 2016.
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