A rare Siglap Road condo site attracted eight bids yesterday – testimony to the site’s merits and the need for developers to replenish land banks.
The optimistic bids may also indicate that property firms believe “prices in the East Coast, middle- to upper-tier segment may be reaching the bottom and could recover later this year or in 2017,” said Mr Nicholas Mak, SLP International executive director.
The top four bids were all above $800 per sq ft per plot ratio (psf/pr) and fell within a 7 per cent margin – suggesting a shared bullish outlook in demand for units at the site, said Mr Ong Teck Hui, JLL national research director.
A consortium of Frasers Centrepoint unit FCL Topaz, Sekisui House and Keong Hong Holdings unit KH Capital lodged the top offer of $624.18 million, or about $858 psf/pr for the site between Victoria School and East Coast Parkway.
It intends to build 800 to 900 units on the 1.93ha plot and will launch within a year, mainly targeting owner-occupiers in the mid- to upper-price segment, the firms said in a joint statement.
Based on the top bid, the selling price for a project on the site would have to be at least in the range of $1,400 to $1,500 psf, Mr Ong noted. “That would require favourable market conditions at the time of sales launch.”
The lack of residential development sites could also have contributed to the strong interest.
Experts pointed to the parcel’s proximity to amenities at East Coast Park and Katong, and unblocked sea views as plus points.
There are few new projects in the area. The last time a nearby site was sold was in 2001, now the Cote D’Azur condo, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia. That condo was developed by Frasers Centrepoint Homes.
Other high bids were submitted by joint ventures involving major players – unsurprising, given the nearly $1 billion quantum involved if development costs are included, Mr Sim said. He added that the recent trigger of a condo site in Tanah Merah could have distracted some smaller players.
The Tanah Merah reserve parcel will be up for sale soon as a developer committed to a minimum bid of $320 million, or about $580 psf/pr – a far more pocket-friendly amount.
MERITS OF THE SITE
The last time a site in this area was sold was in 2001. The site is within walking distance of a future station along the Thomson-East Coast Line. It has unblocked views of the sea and enjoys quick access to East Coast eateries.
MR DESMOND SIM, head, CBRE Research, Singapore and South-east Asia