Caution reigns at state land tenders, despite developers’ low unsold private housing inventory

by Albert02

Caution reigns at state land tenders, despite developers’ low unsold private housing inventory

Caution reigns at state land tenders, despite developers’ low unsold private housing inventory. Skepticism greeted the recent GLS tender closings for two 99-year leasehold private home sites near the Beauty World and Hillview MRT stations. The number of offers received was lower than projected by the market. The highest bids for both plots, however, were within the range of estimates provided by property consultants polled by The Business Times prior to the two sites’ bidding closing on Thursday.

Four proposals were received for the Hillview Rise property, which has a capacity of 335 people. Far East Organization and Sekisui House worked together to make the winning bid of S$320.78 million, which equates to approximately S$1,000 per square foot per plot ratio. Five bids were received for a site on Bukit Timah Link near the Beauty World MRT station. Bukit Sembawang Estates’ winning bid of S$200 million, or S$1,343.13 per square foot per year, was 15.7% higher than Wing Tai’s second-best bid.

According to Ong Teck Hui, senior director of research and consultancy at JLL Singapore, “it was expected that the Bukit Timah Link property, which is relatively small and thus less hazardous.” The winning idea, on the other hand, was much more hopeful than the losing proposal. While the inventory of unsold units remains low and developers need to replenish their land banks, there appears to be more caution in bidding for sites as interest rates rise, the effects of recent cooling measures are felt, and macroeconomic uncertainty.”

Nicholas Mak, ERA Realty Network’s head of research and consultancy, also pointed out that the maximum bid for the Hillview Rise site of S$1,023.85 psf ppr is lower than the S$1,068 psf ppr land rate paid for the neighboring Midwood condo site in 2018. Mak pointed out that “the Midwood and Hillview Rise plots are only about 230 meters away.”

The highest bid for the current Hillview Rise site, S$1,023.85 psf ppr, was only 1.3 percent higher than the second-highest bid from City Developments. One reason for the relatively close bids for this site, according to Edmund Tie’s head of research and consulting, Lam Chern Woon, could be that developers are concerned about supply and price competition from the future development on the Dairy Farm Walk site, which was awarded in March this year at a significantly lower S$980 psf ppr.

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