Cuscaden Road site sees record psf price offered for a GLS residential plot

SINGAPORE – A residential Government Land Sales site at Cuscaden Road fetched a record per square foot bid of close to S$2,400, with developers keen to grab a prime plot in the vicinity of Orchard Road on the back of an uptick in the property sector.

A mixed-use site at Silat Avenue also saw a bid of just over S$1 billion, the Urban Redevelopment Authority (URA) said in a statement on Thursday (April 26) evening, while a Mattar Road residential plot attracted 10 bids, with the highest in excess of S$1,100 psf.

“The relatively bullish land bids for the three sites were not unexpected given the upturn in the residential market in Singapore, recovery in prices and rise in market sentiment,” said Ms Tricia Song, head of research for Singapore at Colliers International.

“Developers went in with guns blazing, particularly for the Cuscaden Road site, setting a benchmark price for a 99-year leasehold site.”

The top bid of S$410 million – some S$30.6 million higher than the next one – by Amberden, FEC Properties and Orchard Square worked out to be equivalent to S$2,377 psf per plot ratio.

The successful bidder can build a maximum permissible gross floor area of 16,023 square metres, or 172,470 sq ft, with URA earlier indicating that it could accommodate around 170 residential units.

“All the nine bids for the Cuscaden Road site were above S$2,000 psf ppr. This will give a shot in the arm for the land sale market, especially the enbloc sale market,” said ZACD Group executive director Nicholas Mak.

Ms Song noted that the top bid of S$2,377psf ppr exceeded the previous residential GLS record of S$1,733 for a Jiak Kim Road site by 37 per cent.

Based on this land price, she estimates a breakeven price of S$3,100 psf, and a selling price of S$3,500 to S$3,700 psf.

“While bullish, it is probably achievable, as nearby freehold luxury new launches such New Futura, Ardmore Le Nouvel have achieved average prices of S$3,200 to S$4,000 psf, while 99-year leasehold Wallich Residence in Tanjong Pagar has sold some units at S$3,700 psf.”

Mr Lee Sze Teck, head of research at Huttons Asia, noted that the site at Cuscaden Road was “very rare” given its proximity to the Orchard Road shopping belt.

“The last GLS in Orchard Road was in 2005 which has been developed into The Orchard Residences and ION Orchard. If such sites are released, they are usually hotly contested…this site is opposite the future Orchard Boulevard MRT station which further strengthens its appeal,” he said.

Ms Song noted that the highest land price ever paid was for a site next door, when YTL bought the former Westwood Apartments collective sale for S$2,525 psf during the market peak in 2007. It has been developed into 3 Orchard-by-the-Park.

Park House, next to the sites, was recently launched for collective sales, with a asking price of S$2,387 psf.

A consortium of UOL Venture Investments, UIC Homes, and Kheng Leong Company was the only bidder for the 22,852 square metre site at Silat Avenue located along a section of the 24-km long rail corridor across Kampong Bahru Road, putting in an offer of S$1.035 billion, said URA.

The 99-year leasehold plot has a maximum permissible gross floor area of 84,551 square metres or 910,099 sq ft, which means the tender price is equivalent to around S$1,137 per square foot. An estimated 1,125 housing units can be built while about 450 sq m can be set aside for commercial space on the ground floor.

The site is almost similar in size to a residential plot in Queenstown that was clinched by China’s Nanshan Group and Hong Kong’s Logan Property for S$1.003 billion, or S$1,051 psf, in May last year.

“Silat Avenue is an appealing site within two kilometers from the Central Business District, and we think the underwhelming tender outcome could be due to the large size of the site and relatively untested location, away from MRT stations,” said Ms Song.

She estimated a breakeven price of S$1,600 psf and a selling price of between S$1,800 and S$1,900 psf.   The Mattar Road site next to Mattar MRT has a maximum permissible gross floor area of 18,691 square metres (201,188 sq ft), and top bidder FSKH Development’s offer of S$223 million translates to S$1,108 psf.

URA has said that an estimated 250 units can be built on the plot. Mr Lee of Huttons said the GLS bids are a sign that developers are “increasingly confident” about the outlook of the property market in 2018.

“Strong sales numbers from new launches and record turnout at showflats are testament to the deep underlying demand in the market,” he said.

The sites at Silat Avenue and Mattar Road were launched for public tender on March 16 while the Cuscaden Road site was launched on Feb 27. A decision on the award of the tenders will be made after the bids have been evaluated, said URA, which added that this will be publicised at a later date.