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Thread: Chinese Developers bidded $1b or 1051psf ppr for the Stirling road site

  1. #11
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    Nov 2015
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    Not really surprising for a city fringe location. A comparable development of this size is PLQ which transacted at $943psf but that was couple of years back. PLQ is right next to MRT though but this is a few minutes walk away from Queenstown MRT. More peace and quiet.

    At this rate, we will be looking at $1,500psf for breakeven and $2,000 as base selling price in 2022 or so. Its a little hard for me to think Queenstown/Alexander area will fetch such prices a few years back.

    This will have an effect on Phase IIs of Principal Garden, ARTRA this year and all future condo developments near Bukit Merah-Queenstown belt. Agents will definitely drumbeat for these second phases which is technically not wrong.

    What I am unsure of is the background of these 2 developers (Logan and Nan Shan) other than they have lots of dough. Anyone can shed some light on these 2 newcomers?

    2 cents,
    PropVestor

  2. #12

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    Quote Originally Posted by PropVestor View Post
    Not really surprising for a city fringe location. A comparable development of this size is PLQ which transacted at $943psf but that was couple of years back. PLQ is right next to MRT though but this is a few minutes walk away from Queenstown MRT. More peace and quiet.

    At this rate, we will be looking at $1,500psf for breakeven and $2,000 as base selling price in 2022 or so. Its a little hard for me to think Queenstown/Alexander area will fetch such prices a few years back.

    This will have an effect on Phase IIs of Principal Garden, ARTRA this year and all future condo developments near Bukit Merah-Queenstown belt. Agents will definitely drumbeat for these second phases which is technically not wrong.

    What I am unsure of is the background of these 2 developers (Logan and Nan Shan) other than they have lots of dough. Anyone can shed some light on these 2 newcomers?

    2 cents,
    PropVestor
    China property strategy is simple. Over pay your competitor products (Singapore) to make their own product (Johor bahru) looks really cheap.

  3. #13

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    Is there any presedence the highest gls bid get rejected by gov?

  4. #14

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    China group beats forecasts with record S$1b bid for GLS site

    Queenstown plot draws bids from several China and major local players; project size, unsold nearby supply are factors winning bidder will have to deal with

    May 19, 2017

    LYNETTE KHOO


    A LARGE residential plot at Stirling Road launched by the government drew a record price of over S$1 billion in a joint bid from Logan Property Holdings - a newcomer hailing from China's Guangdong province - and Chinese conglomerate Nanshan Group.

    The bullish bid of S$1,050.7 per square foot per plot ratio (psf ppr) on gross floor area for the 99-year-leasehold site also sets a new record in the Queenstown area, analysts point out.

    This marks Hong Kong-listed Logan Property's maiden participation in the Government Land Sales (GLS) programme and foray into the Singapore residential market. "Bullish bidding is now the norm for GLS residential sites, driven by expected market recovery and limited number of sites on the market," said JLL national research director Ong Teck Hui.

    The site - despite its 2.11-ha size and heavy financial commitment required - saw a healthy demand of 13 bidders in total.

    CBRE head of research for Singapore and South-east Asia Desmond Sim noted that the substantial number of bidders for this relatively large plot reflects both the hunger of developers for limited sites and their upbeat sentiments. "The turnout is also another indicator that the market has indeed reached a trough," he concluded.

    In what analysts see as a determination to enter the Singapore market, the top bid by the Chinese consortium is 8.3 per cent higher than the next highest bid tabled by MCL Land, and is 20.6 per cent higher than the S$871 psf ppr that MCC Land paid in June 2015 for the land parcel for Queens Peak.

    This also came above the consultants' forecast range of S$780-S$1,000 psf ppr. Cushman & Wakefield research director Christine Li noted that the top bid "signals the developers' strong confidence in the Singapore residential market, their belief that prices could return to growth soon and the ability to price higher than the existing launches in the vicinity". Competition was fairly stiff with close to half of the tenderers bidding in excess of S$900 psf ppr for the site, she added.

    Logan Property investor relations director Derek Lee told The Business Times that while the group continues to be focused on the Guangdong-Hong Kong-Macao Greater Bay Area, it has been studying the Singapore market for a while and believes "this is the right time to enter Singapore".

    "No one knows where the (market) bottom is but our bidding price is reasonable given the quality land site and location," Mr Lee said.

    The 227,000 sq ft plot near Queenstown MRT Station is expected to yield 1,110 units. Mr Lee said it is too early to share further details on the project, but analysts are projecting an average selling price from S$1,700 psf northwards.

    Ms Li noted that despite the capital controls put in place by the Chinese government on the outflow of funds, the sheer amount of liquidity in the market is driving the appetite of aggressive Chinese developers.

    Other Chinese players who participated in this tender were Kingsford Development and China Construction; the site also drew interest from major Singapore players CapitaLand, a consortium led by Hong Leong Holdings, UOL Group that tied up with Singapore Land, and Frasers Centrepoint Ltd.

    Edmund Tie & Company head of South-east Asia research Lee Nai Jia felt that with recent land bids and successful launches reinforcing developers' upbeat sentiments, it "will not be surprising to see another record bid for the tender of the mixed-use site located near the Bidadari Housing Estate".

    But there was also caution from some developers who tabled the lower bids.

    Mr Ong noted that the second to eighth bids were in the range of S$885-S$970 psf ppr, closer to expectations and within a 10 per cent margin. This suggests some consensus in their outlook as well as caution, given the huge scale of the development and the unsold supply in the vicinity, he said.

    The land parcel was first made available for sale on the Reserve List in March 2010 as two smaller adjoining parcels, before being merged as a single parcel for sale on the H1 2012 Reserve List. It was triggered for sale in April after a developer committed to bid at no less than S$685.25 million.

    The tender conditions for the Stirling Road site require the winning bidder to apply pre-fabricated pre-finished volumetric construction (PPVC) method for the development, a construction method that involves entire unit modules being fabricated off-site before being assembled on-site. It will also have to provide an infant care and/or a child care centre with a minimum gross floor area of 500 sq m.

    SLP International executive director Nicholas Mak said he expects the developers for this project to launch the residential units at above S$1,780 psf from mid-2018 onwards.

    But he flagged that the relatively large project heightens the risk of developers having to pay the additional buyer's stamp duty on the land cost if they do not sell all the units within five years.

    Still, market watchers are expecting this bidding fervour to spill over into the en bloc market, where the first collective sale of One Tree Hill Gardens near Orchard Road has been snagged by Lum Chang Holdings this month for S$65 million.

    Demand for en bloc sites, however, will depend on how many GLS sites the government will decide to release in the second half of this year, Mr Mak said.

    Cooling the rising temperature in the land sale market may be seen as a greater priority now, even at the risk of an oversupply in the rental market three to four years down the road, he added.

  5. #15

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    Quote Originally Posted by Tomutomi View Post
    Is there any presedence the highest gls bid get rejected by gov?
    LOL. Wait long long.

    Will be surprised if the bid is deemed too high and get rejected.

    This government is either clueless on what is happening in the property market, or is simply bochap.

    An exuberance take-up rate of new launches will not trigger a bull market in the wider market. Just consider who benefits from new launch sales? Yes, the bullish bid of GLS is the result of money printing.

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