City Developments (CDL) and joint venture partner, MCL Land, submitted the top bid of $445.888 million, or $1,129 psf for the 8,732.9 sq m site. Photo: URA Space
A 99-year leasehold site at Northumberland Road attracted robust interest during the close of its tender on Tuesday evening (27 April), with 10 bids received. The residential government land sales (GLS) was launched on 27 October 2020.
The 8,732.9 sq m site is zoned for residential with commercial at first storey use and could yield about 405 housing units.
Maximus Residential SG and Maximus Commercial SG (a joint venture between CDL and MCL Land) submitted the top bid of $445.888 million, while Winrich Investment submitted the second highest at $421.89 million.
Japura Development, on the other hand, offered the lowest bid of $256 million.
Alice Tan, Head of Consultancy at Knight Frank Singapore, said the top bid of almost $446 million or $1,129 per sq ft per plot ratio (psf ppr) “is 5.7% above the second highest bid of about $422 million or $1,069 psf ppr, and 74.2% higher than the lowest bid of $256 million”.
Read more about GLS sites here, including the newly announced Lentor Central and Tampines Street 62 sites.
Nicholas Mak, Head of Research and Consultancy at ERA Singapore, attributed the robust tender participation rate to the diminishing private housing supply within the city-fringe area.
“The only new project that is not yet launched in the Rest of Central Region is the 388-unit Liv @ MB located in District 15,” he said.
Tan noted that the government land sales were also few and far between, while en bloc sales were practically negligible last year.
Suggested read: En Bloc to Make a Comeback in 2021: A Look at 74 Past Unsuccessful En Bloc Sales
“These factors could possibly combine to create a compression point where the shortage of development land could lead to competition heating up among developers to secure available land parcels from the GLS lists,” she said.
The most recent GLS site that was sold within the vicinity was the land plot for Uptown @ Farrer on Perumal Road. The site was sold to Low Keng Huat (Singapore) Limited for $1,001 psf ppr in January 2017.
Tan said the breakeven cost for the Northumberland Road site could be between $1,800 psf and $1,900 psf, based on the $1,129 psf ppr top bid.
“As such the likely selling price for the residential units here when launch ready could start from $2,100 psf to $2,200 psf,” she said.
Mak said the 405 dwelling units is “rather manageable for most developers to build and sell all the units within five year, thus minimizing the risks of exceeding the ABSD deadline”.
Once completed, the site will benefit from the convenience of Farrer MRT station as well as the shopping options of Mustafa Centre and City Square Mall. The project will also be near integrated medical centre and hotel development Connexion.
As the first residential GLS tender to close this year, the site “would set the tone for the other two GLS tenders that will close on 25 May 2021”, added Mak.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: email@example.com