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Thread: Toh Tuck site draws record 24 bids, $265m offer

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    Default Toh Tuck site draws record 24 bids, $265m offer

    Toh Tuck site draws record 24 bids, $265m offer

    Apr 12, 2017

    Malaysian developer leads top seven bids of above $800 psf ppr for 99-year leasehold plot

    Lee Xin En


    A Malaysian developer has trumped a record field of 24 contenders to lodge a sky-high bid for a Toh Tuck Road site.

    S P Setia offered $265 million for a plot that experts tipped would go for under $200 million.

    The top seven bids came in at above $800 per square foot per plot ratio (psf ppr), higher than estimates of between $560 and $750 psf ppr. S P Setia's bid translates to $939 psf ppr for the 18,721.4 sq m site.

    "It is a bewildering tender," said Mr Ong Teck Hui, JLL's national director of research and consultancy.

    "Hunger for sites among developers and an expectation of a turnaround in the market are possibly the key factors that intensified the bidding, besides the attractiveness of the site and the affordable capital outlay."

    Analysts said the robust bid suggests the project will be launched at prices above current levels, with the break-even price based on the top bid likely to exceed $1,400 psf ppr. The 99-year leasehold plot, which is expected to yield about 325 private homes, is the first of five residential sites offered under the confirmed list of the Government Land Sales programme for the first half of this year.

    The previous record number of bids for a non-landed site was set in 2012, when 23 offers were lodged for a Jalan Jurong Kechil plot. In the landed housing segment, a plot in Jurong West drew 32 bids in 2009.

    The robust contest comes a day after a large reserve list site at Stirling Road was triggered for $685.25 million. Analysts were taken aback by the level of competition for the Toh Tuck Road site, as well as the high offer price, which they said signalled extremely bullish expectations on the part of developers.

    The number of bids and the prices far exceeded initial estimates, which had been between eight and 16 bids, with prices forecast at below $200 million.

    Mr Nicholas Mak, head of research at SLP International Property Consultants, described the top bids as "super bullish", noting that the site's location and its manageable size explained why it was so fiercely contested. The land is near the prime Bukit Timah housing district and is within walking distance of Beauty World MRT station.

    "A new benchmark price has been set for the vicinity," said Ms Christine Li, director of research at Cushman & Wakefield. "It seems that after the Government tweaked the cooling measures in March, there is a clear consensus among developers that demand will be strong enough to continue absorbing the increase in new supply."

    She added: "Given that the majority of the bids exceed market expectation, developers are also bullish on eventual selling prices."

    This expectation is likely supported by the stellar sales of new launches this year, Ms Li added, noting: "Should the exuberance in the land tender continue, we expect that more reserve sites will be triggered, or more en bloc sales will go through."




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    Default Bullish bidding for Toh Tuck site

    Bullish bidding for Toh Tuck site

    Tender for the residential plot gets 24 submissions, topped by SP Setia's S$265m, exceeding expectations

    Wednesday, April 12, 2017

    by Lee Meixian
    [email protected]
    @LeeMeixianBT


    AN overwhelming 24 bids were submitted for the tender of a residential plot in Toh Tuck Road, the Urban Redevelopment Authority (URA) announced on Tuesday.

    This was the second highest number of bids submitted in a residential government land sales (GLS) tender since 2009, when the tender for a parcel in Westwood Avenue attracted 32 bids.

    More recently, in November 2012, a tender for an Upper Bukit Timah plot also came close, garnering 23 bids; it was won by World Class Developments, a unit of Aspial Corporation, which developed it into the 60-year leasehold "retirement resort", The Hillford.

    In the latest tender results, Malaysian property developer SP Setia International put in the highest bid at S$265 million, which translates to about S$939 per square foot per plot ratio (psf ppr).

    The results completely exceeded property consultants' earlier expectations of up to 16 bidders, with the highest bid at no more than S$750 psf ppr.

    When contacted, Neo Keng Hoe, general manager at SP Setia, said the group plans to build a five-storey 320-unit development on the plot, but he could not comment on launch prices at the moment.

    In second place was Singhaiyi Investments with a bid of S$260.2 million (or S$922 psf ppr); and in third place, Centrex Developments with a bid of S$250.9 million (or S$889 psf ppr).

    JLL national director for research and consultancy Ong Teck Hui called it a "bewildering tender".

    "Hunger for sites among developers and an expectation of a turnaround in the market are possibly the key factors that intensified the bidding, besides the attractiveness of the site and the affordable capital outlay. The recent easing of cooling measures and the positive reading of the Q1 2017 flash estimates are possible underlying contributory factors," he said.

    The 18,721.4 square metre (sq m) site can yield a maximum gross floor area of 26,210 sq m, or about 325 units, which consultants had considered to be a manageable size for property developers.

    Mr Ong noted that the bidding was particularly aggressive among the top five bidders which was within a 10.4 per cent price range, and all of them were above S$850 psf ppr, suggesting that they shared a similar bullish market outlook.

    He added that the top bid translates to a break-even price of about S$1,450 psf, and launch price of about S$1,600 psf.

    Desmond Sim, head of CBRE Research, Singapore & South East Asia, said the exceptionally high number of bids reflects developers' keenness to shore up their land banks in the face of a dwindling number of residential plots for sale.

    "The first seven bids came in at above S$800 psf ppr, with a 1.8 per cent margin between the top two bids. This is a very clear indication that the window of opportunity through government land sales has tightened.

    "The plot's attractive quantum of S$265 million gave developers the extra nudge, along with increasing confidence in the market's possible recovery in the medium term. The bid value may be relatively high but the manageable project size of around 325 units makes it a less risky proposition," he said.

    Cushman & Wakefield Singapore research head Christine Li added: "It seems that after the government tweaked the cooling measures on March 10, there is a clear consensus among the developers that the demand will be strong enough to continue absorbing any increase in new supply."

    Their optimism could also have been bolstered by the stellar sales performance in the mid-tier and mass market segment, judging by the new launch results since the beginning of the year, she said.

    She is expecting more reserve sites to be triggered in the coming months, and more private en bloc deals to go through.

    The subject site is located along Upper Bukit Timah, nestled within an established residential estate of both public and low-rise private housing surrounded by amenities including local and international schools, tertiary institutions, shopping centres and transport nodes.

    SLP International executive director Nicholas Mak, however, noted that the developers who made bids were not uniformly bullish.

    "About one third of the 24 bids were rather conservative. I believe that these developers are aware that this tender could be highly contested, and yet they still submitted conservative bids. This shows that they are not prepared to throw caution to the wind just for the sake of clinching a land parcel," he said.

  3. #3

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    everyone wants to buy singapore land. 60mil, sell about another 60 units can earn back liao.

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    Almost guaranteed can make money one lol

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