Toa Payoh tender hotly contested despite sluggish new-home sales

SINGAPORE — Despite sluggish new-private-home sales, a tender for a land parcel situated at the corner of Lorong 6 and Lorong 4 Toa Payoh has attracted competitive bidding from developers in a hotly contested tender.

The 130,831 sq ft site garnered 14 bids at the close of tender yesterday, the Housing and Development Board (HDB) said in its capacity as the Government’s land sales agent. The highest bid of S$345.9 million, or around S$755 per sq ft per plot ratio (psf ppr), was submitted by a consortium comprising Evia Real Estate, Maxdin and Gamuda Berhad.

 With a maximum gross floor area of 457,908 sq ft, the 99-year leasehold site released from the Confirmed List of the Government Land Sales (GLS) programme for the first half of the year can yield an estimated 535 private housing units.

“It’s not surprising to see such interest in the site because there has been a lack of new launches in the area for a number of years. The top bid is a little higher than my initial estimate, but looking at how close the bids are, that means there is no overbidding in this tender,” said Mr Wong Xian Yang, senior manager of research and consultancy at real estate agency OrangeTee.

The top bid by the Evia-led consortium was only 1.1 per cent higher than the second-highest bid of S$342.1 million, or around S$747 psf ppr — the closest gap seen since the second quarter of last year, when a site in Choa Chu Kang Drive was awarded to Sim Lian Land at a margin of 2.2 per cent over the next bidder, noted Dr Chua Yang Liang, head of research and consultancy at JLL Singapore.

“The tightness of these recent bids could reflect a more consistent view among the developers regarding market conditions going forward, coupled with the fact that the area is more mature and there is possibly more transactional data to help developers assess market demand more consistently,” said Dr Chua.

Ms Christine Li, director of research at property firm Cushman & Wakefield, said the top bid also showed that land prices in the area had held up despite tepid sales in the primary market. She noted that the bidding was in line with the S$731 psf ppr for a parcel in Lorong Puntong in the Upper Thomson area.

Ms Li expects the break-even price of the Toa Payoh project to be at around S$1,250 psf and the selling price to start at S$1,450 psf to S$1,500 psf. “Given that there have not been new private-home launches since 2009, this project should be well received by upgraders and first-time buyers if it is priced realistically,” she said.

Evia has launched three executive condominium developments since its founding in 2010. It has sold 98 per cent of the 546 units for its latest project, Lake Life in the Jurong Lake District, since the launch in November.

Following the release of the provisional tender results for the Toa Payoh site, Evia’s managing partner Vincent Ong said: “Similar to Jurong, we believe there is a pent-up demand for private housing in this area, as it is one of the most populated public housing estates in Singapore and is the closest estate to the city.”