$685m bid triggers sale of Queenstown residential site

[reporter2]

$685m bid triggers sale of Queenstown residential site

Apr 11, 2017

Lee Xin En


In a sign property developers are hungry for land amid improving market sentiment, a large residential site for private homes in Queenstown has been triggered for sale.

A developer committed to bid at least $685.25 million for a 2.11ha Stirling Road site, able to yield about 1,110 units, the Urban Redevelopment Authority said yesterday. Unlike sites on the confirmed list which go on sale automatically, sites on the reserve list are put up for sale only after a bid acceptable to the Government is received.

The site has been on the Government Land Sales reserve list since March 2010. It is made up of two adjacent sites once offered separately but merged into one site in 2012.

The 99-year leasehold site is next to Tiong Ghee Temple and near Anchorpoint shopping centre.

As it is one of the larger sites on offer, analysts said the bid reflected better market sentiment, and developers' growing appetite for residential land. "The triggering of this site is by a developer who felt that the private residential property market has a high chance of getting out of the woods - there's some light at the end of the tunnel," said Mr Ong Kah Seng, director of R'ST Research.

He noted that many developers are running low on land and have to demonstrate that they have longer- term corporate growth strategies.

Mr Ong Teck Hui, JLL's national director of research, agreed that upbeat sentiment and keen buying interest this year prompted the bid.

"Being a prime city-fringe site, it is also likely to generate much interest and attract buyers easily."

Analysts expect competitive bidding. Mr Desmond Sim, head of South-east Asia research at CBRE, said the site "has very good attributes" and is within walking distance of Queenstown MRT station.

He added that the parties bidding will likely form "joint ventures as $685.25 million is a big undertaking". Based on a maximum permissible gross floor area of 954,328 sq ft, the bid translates to a price of $718 per sq ft (psf) per plot ratio. Analysts expect bids to climb further, to between $830 psf and $950 psf.

Mr Nicholas Mak, SLP International Property's executive director of research, expects eight to 14 bids. Good sales at nearby projects andthe easing of property curbs "should lift the confidence of bidders".

JLL's Mr Ong expects between seven and 11 bids, but noted unsold supply in Commonwealth Towers, Queens Peak and an upcoming project in Margaret Drive. The pricing will likely take a cue from Queens Peak, with an average of $1,640 psf, and Commonwealth Towers, at an average of $1,654 psf, he added.

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[reporter2]

Keen bidding expected for Stirling Road residential site

The site, which can yield 1,110 units, finally released after developer's commitment to bid at least S$685.25m

Tuesday, April 11, 2017

by Lynette Khoo
[email protected]
@LynetteKhooBT


A RESIDENTIAL site at Stirling Road, which has been on the Reserve List of the Government Land Sales (GLS) programme for the past seven years, has finally been triggered for sale by public tender after a developer committed to bid at no less than S$685.25 million.

This minimum price translates to S$718 per square foot per plot ratio (psf ppr), based on the site's maximum gross floor area of 88,660 square metres.

The 99-year leasehold site, near Queenstown MRT station, is expected to yield 1,110 units, said the Urban Redevelopment Authority (URA) on Monday.

Property consultants estimate that there will be six to 14 bids for the site, with the top bid likely to come in at S$830-954 psf ppr.

The 2.11 ha land parcel was first made available on the Reserve List in March 2010. Sites on this list are triggered for tender only when an interested party submits an application with a minimum price that is acceptable to the government.

SLP International executive director Nicholas Mak reckoned that this site could be the biggest residential site to be sold this year, adding that it is fairly uncommon for the government to sell condominium sites that can yield more than 1,100 units.

One reason why it has taken so long for a developer to trigger the public tender for the site, which is nestled in a mature residential area with nearby amenities and schools, is probably the large size of the site and the heavy financial commitment required, Mr Mak posited.

JLL national director for research Ong Teck Hui felt that the triggering of the large site is supported by positive market sentiment this year that has already translated to keen buying interest and encouraging take-up rates in new sale launches.

"Being a prime city-fringe site, it is also likely to generate much interest and attract buyers easily. The pricing of units is likely to take its cue from Queens Peak (average S$1,640 psf) and Commonwealth Towers (average S$1,654 psf)," Mr Ong added.

CBRE Research head for Singapore and South-east Asia Desmond Sim noted that the triggering of public tender for this site was keenly anticipated given "very limited opportunities should developers rely on the sites on the GLS' Confirmed List". But given its scale, the tender will likely see major players teaming up; yet their bids will be pricing in the tight land supply situation and a potential recovery in the residential market, Mr Sim said.

Edmund Tie & Company's head of South-east Asian research Lee Nai Jia, however, held a different view. He believes that developers' appetite for the site may be tempered by upcoming developments in the vicinity including Artra at Alexandra View by Tang City Holdings (with an estimated 400 units), and the recently sold GLS site at Margaret Drive (to yield an estimated 300 units).

"In light of the supply in the area, some developers' may focus on the land parcels at Upper Serangoon Road and Toh Tuck Road instead," he said, referring to sites under the Confirmed List.

URA said it will launch the public tender for the Stirling Road site in about two weeks. The tender period for the land parcel will be about four weeks.

The tender conditions state that the winning bidder will have 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.