Interest in site near Little India seen, but low bids likely

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Interest in site near Little India seen, but low bids likely

Published on Feb 11, 2015 1:20 AM

By Cheryl Ong


A SITE near Little India - the first of six sites to be sold under the Government Land Sales programme for the first half of the year - was rolled out yesterday.

The 99-year leasehold site in Sturdee Road can accommodate a condominium with 265 units.

Analysts expect the tender to attract keen interest from developers. However, most said that while the site is well-located, close to the Farrer Park MRT station, it is likely that weak property market sentiments will weigh on bid prices.

The Government has scaled back on land sales to guard against an oversupply of units, giving developers much less land to fight over this year. A moderation in land sales will allow the market to absorb unsold inventory.

The size of the 65,784 sq ft parcel in Sturdee Road will be "palatable" to developers, as that will keep the total price of the site down, the analysts said. It was put on the confirmed list, which means it will go on sale regardless of interest. Sites on the reserve list are put out to tender only if developers make an acceptable initial offer. The site, which is in an "emerging trendy enclave", will be "well-served" by F&B and entertainment outlets, said Mr Desmond Sim, head of research at CBRE South-east Asia.

With a potential gross floor area of 230,251 sq ft, it can accommodate a 30-storey condominium, said the Urban Redevelopment Authority.

Analysts expect seven to 15 bids, with a potential tender price of $138 million to $166 million, or $600 to $720 per sq ft (psf) per plot ratio. "Under better market conditions, demand for this site would have been red-hot, with robust bidding. But sentiments are now softer and developers are also more cautious, so keen interest is likely to be tempered by some realism in bidding," said Mr Ong Teck Hui, national director of research and consultancy at JLL.

Based on the estimates, units at the new condominium could be sold for $1,250 to $1,350 psf.

At the 862-unit Eight Riversuites project in Whampoa East, units have fetched an average of $1,290 psf, while units at the 910-unit City Square Residences have been sold for an average of $1,508 psf, data from Squarefoot Research showed.

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Sturdee Rd site would have seen 'red hot' demand in better times

By Kalpana Rashiwala

[email protected]@KalpanaBT

11 Feb


PROPERTY consultants gave a wide range of forecasts for the number of bids - from three to 15 - for a 99-year private housing site along Sturdee Road released by the Urban Redevelopment Authority (URA). However, their forecasts for the top bid bunched around S$700 per square foot per plot ratio (psf ppr).

Located near City Square Mall and Farrer Park MRT Station, the 0.6-hectare site can be developed into a 30-storey project with an estimated 265 homes. Property consultants noted that the site boasts an attractive city-fringe location with shopping, eating places and other conveniences nearby.

The plot's relatively bite-sized offering - assuming a pricing of S$700 psf ppr, the lump-sum price would be S$161.2 million - means it should attract a fairly high level of participation at tender from small and medium-sized developers, resulting in about 10 to 15 bids, predicts SLP International executive director Nicholas Mak.

"However, the weaker residential property market would weigh on bid prices," said Mr Mak, who predicts the winning bid to be around S$600-S$680 psf ppr.

JLL national director Ong Teck Hui argued that under better market conditions, demand for the plot would have been "red hot with robust bidding".

"However, sentiments are now softer and developers more cautious, so keen interest is likely to be tempered by some realism in bidding," said Mr Ong, who predicts seven to 12 bids with the highest in the S$650-S$720 psf ppr range.

Desmond Sim, South East Asia head at CBRE Research, too expects at least 10 bidders for the Sturdee Road plot. "It is within an emerging trendy enclave, in a quiet corner of a bustling neighbourhood well served by F&B and entertainment outlets," he added.

Giving a different perspective, R'ST Research director Ong Kah Seng noted that the Sturdee Road plot had been made available for application on the reserve list since August 2013 and had not been triggered by developers for launch (the site was transferred to the confirmed list for the first half 2015 Government Land Sales or GLS Programme). "This suggests limited developers' interest for the site," he said.

Sites on the reserve list are launched for tender upon successful application by a developer, accompanied by an undertaking of a minimum bid price that is acceptable to the state. Confirmed list sites, on the other hand, are launched for tender according to schedule, regardless of demand. The Sturdee Road land parcel is the first of six private housing sites slated for launch on the confirmed list of the current H1 2015 GLS Programme.

R'ST's Mr Ong reckons that developers are unlikely to bid aggressively for the land parcel, despite its good location. While the site has strong potential for development into investment homes, the sheer size of the nearby City Square Residences would make investors in new projects ponder if there will be intense leasing competition in the locale.

On the other hand, the developer of the Sturdee Road project could easily use City Square Mall's amenities as a selling point to attract buyers. "However, further up in Potong Pasir, there is a substantial supply of new private housing units under construction," he pointed out.

Mr Ong expects three to seven bids for the Sturdee Road site, with the top bid in the S$690-S$750 psf ppr band. He projects the selling price for the proposed project on the site to be about S$1,450-S$1,520 psf. Mr Mak estimates a lower launch price of S$1,250-S$1,350 psf.

JLL's Mr Ong noted that the Eight Riversuites condo project (near Boon Keng MRT Station) has fetched an average price of S$1,290 psf for units sold since 2014, with an average size of 980 sq ft.

"Slightly further away in Geylang, recent sales prices of TRE Residences have been averaging S$1,560 psf, albeit for small units averaging 570 sq ft. The land price for this project was S$776 psf ppr in January 2014 with 16 parties contesting," he added. TRE Residences is next to Aljunied MRT Station.

URA's tender for the Sturdee Road site closes on March 24.