99-year leasehold residential site in Woodlands was found to have drawn a surprising eight bidders

A 99-year leasehold residential site in Woodlands was found to have drawn a surprising eight bidders when the government tender closed yesterday, with the top bid coming to some $56 million - or $232 per square foot per plot ratio (psf ppr).

Recent government land tenders have drawn only a few bidders each, which market watchers said was a sign of the property market cooling off.

For the 172,200 sq ft site at Woodlands Avenue 2/Rosewood Drive, the top bid was put in by Evan Lim & Co Pte Ltd.

The company just pipped second highest bidder Frasers Centrepoint, which offered $55.5 million - or $230 psf ppr.

Other bidders include Wing Tai and Sim Lian Land. The site has a 1.4 plot ratio - giving it a maximum gross floor area of 241,100 sq ft.

Nicholas Mak, director of research and consultancy at Knight Frank, said that the price was ‘realistic’, although it came in below prior market expectations of $250-$280 psf ppr.

The number of bids was impressive, considering the recent market turbulence, experts said. ‘The bids show that developers are confident of healthy suburban buyer demand,’ said Mr Mak.

Ku Swee Yong, Savills Singapore’s director of marketing and business development, said: ‘Developers still see that there is good demand from the mass market, arising from job growth and rising wages.’

With construction costs for mass market condos estimated at about $300 psf, the break-even price for the site could be around $530 psf, experts said.

This means that apartments in the project could eventually be launched at about $700 psf - higher than what private homes in Woodlands are fetching at the moment.

Separately, the Urban Redevelopment Authority (URA) on Monday awarded a transitional office site at Tampines to City Developments’ unit Glades Properties.

The developer had put in the only bid for the site, offering $10 million, or $81 psf ppr - lower than the $100 psf ppr that most property consultants had expected the 15-year leasehold site to fetch. This led to market talk that the site might not be awarded.

Yesterday, URA also said that an unnamed developer has entered a bid of $187 million for a 3.2ha, 99-year leasehold residential site at Simei Street 4, triggering a public tender which will be launched in two weeks’ time.

The price offered by the developer works out to $235 psf ppr. The site has a 2.3 plot ratio - giving it a maximum gross floor area of 797,400 sq ft.

Market watchers, however, reckon that the plot could fetch more.

‘I think the winning bid could come to $350 psf ppr,’ said Ho Eng Joo, Colliers International’s executive director for investment sales. Apartments coming up on the site could be launched at about $800 psf, he said.

URA yesterday also awarded the tender for the 99-year leasehold condo site at Enggor Street (Land Parcel B) to Allgreen Properties, which had submitted the highest bid of $717 psf ppr in a public tender.

Source : Business Times - 21 Nov 2007