10 bids for Middle Road’s land parcel and only 5 bids for a land parcel at Sims Drive.
The recent Urban Redevelopment Authority (URA) tender closing gains both 99-yr leasehold sites a mixture of offers.
A plot along Bugis’ Middle Road receives 10 bids – the highest of which is the approximately S$492 million, which is equivalent to S$1,458.33 per square foot per plot ratio or psf ppr, bid from Wing Tai.
It is noted that the land parcel is originally slated for residential use with commercial set-up at its first storey. This is within the expected bid.
A private housing plot located over the Sims Drive locale area in Geylang only yielded 5 bids. The plot’s highest bid from City Developments Ltd. and Hong Leong Holdings is nearly S$383.53 million, which is S$732.01 psf ppr. Such bid is considered below its expectations.
Tricia Song, research head of Colliers International for Singapore, considers this bid as the lowest among the private residential lands since the winning bid amounting to S$681 psf ppr for the Chong Kuo Road site in the early days of 2018. This is the time prior to the new cooling measures in July 2018.
The contrasting tender yields for both plots in the Bugis area is attributable to the subjectivity of Sims Drive plot to the non-landed private residential project average unit size of 85 square metres. This is outside the Central Area.
This is not the case for the Middle Road site. Such plot frees up its developer in building a higher small apartment proportion to increase the average psf rate while the absolute price remains palatable.
Many market observers expect the use of Middle Road plot’s highest bid for peg pricing for an even more attractive site along Tan Quee Lan Street – an area situated just above Bugis interchange MRT Station, which will be launched by URA.
Ms. Song notes the second thought of the GuocoLand tender for the Sims Drive plot at nearly S$655 psf ppr, which is lower than the top bid by 11 percent.
The bid for Guocoland was lower than its S$688 psf ppr bids for its next-door plot in 2014.
Such is a significant bid for the company. This was actually developed into Sims Urban Oasis with 1,024 units. More so, keep in mind that the attractive condominium was already totally sold.
According to Ong Teck Hui, the senior director of research and consultancy of JLL Singapore, the Sims Drive plot is strategically located in an area surrounded by industrial properties, HDB estates, off the Aljunied MRT Station, and next to the Pan Island Expressway.
Nicholas Mak, executive director of ZACD Group reveals Sims Drive site’s top bid was 34 percent, which is lower than S$1,109 psf ppr compare to a plot site near the Mattar MRT Station that was awarded in last May 2018.
A spokesman of Hong Leong Group comments on Sims Drive site’s top bid noting that the joint venture will be exploring residential project development of nearly 560 units.
It notes the proximity of the site to remarkable schools like Canossa Catholic Primary and Geylang Methodist. Another merit from the property is its proximity to Paya Lebar MRT Station, which is actually a one-stop ride from Aljunied station with the newly-constructed Paya Lebar Quarter mixed development.
Middle Road site attracts 10 bids and Wing Tai won the bidding war
Middle Road top bidder Wing Tai’s a spokeswoman discloses the excitement in creating a quality development of mixed commercial and residential offerings in the area.
The company bids 4.7 percent higher than the S$1,393 psf ppr, the second highest bid, from the Greatview Investment-MCC Land (Singapore) partnership.
Desmond Sim, CBRE research head for Southeast Asia and Singapore notes the interest Middle Road received from seasoned developers who are avid in developing residential portfolio in the Beach Road/Ophir-Rochor Corridor complementing the proliferation of offices around the area.
Sim describes the site as an up-and-coming destination to live, play, and to work; with F&B options and commercial developments. It benefits from the housing supply aligning with the aim of the state to launch more housing in the CBD area.
Colliers’ Ms. Song is expecting for possible selling price amounting to S$2,200-2,300 psf.
Analyst Brandon Lee from Citi makes an estimation of the breakeven cost with an amount equivalent to S$2,025 psf based on the top bid of Wing Tai. This is an implication of an average selling price from S$2,250 up to S$2,530 psf to get a profit percentage from 10-20 prior to a tax margin for a new quality wise condo with 375 units.
Ms. Song considers Middle Road site’s 10 bids as the highest when it comes to the number of contenders for this government-owned residential land sale plot. This comes following the tender intended for the Mattar Road plot in the previous year. In fact, this site also gains 10 bids.