http://www.businesstimes.com.sg/arch...erve-list-site
Published June 22, 2012
Only 6 bids for Farrer Drive reserve list site
But SingLand unit's top bid of $1,048 psf ppr marks a high in recent years
By Kalpana Rashiwala
[SINGAPORE] A smallish private housing plot at Farrer Drive has attracted just six bids, though the top bid of $1,048.52 per square foot per plot ratio (psf ppr) from a Singapore Land unit marks a new high for 99-year private housing land offered at a state tender in recent years.
When the Urban Redevelopment Authority announced on May 11 that the reserve list site had been triggered for release following a successful application from an unnamed party with a commitment to bid at least $823.33 psf ppr, analysts forecast 10-20 bids, given the site's proximity to Farrer Road MRT Station and the relatively manageable investment quantum.
One of the property consultants then polled by BT predicted a top bid of up to $1,100 psf ppr. Three others forecast winning bids of $850-950 psf ppr, $930 psf ppr and $1,000 psf ppr.
Despite the site's District 10 address, most developers who carefully examined the site and its terrain decided to give it a miss. One of them told BT: "The configuration is awkward; it has an irregular, elongated shape with a narrow road frontage. There's also an electrical substation next door and an eight-storey height control; it tends to be inward-looking.
"This is a remnant infill site surrounded by earlier projects, it's like 'everybody's backyard'."
Said Knight Frank chairman Tan Tiong Cheng: "Developers have become more selective which site to bid for. And especially for a plot like this which is not catering to the mass market, they may have decided to stay away given the current lukewarm state of the mid- and high-end residential segments."
Michael Ng, group general manager of Singapore Land and its parent UIC, was more upbeat.
Like the earlier Jervois Road site the group clinched in February, a new project on the Farrer Drive plot will be a "discreet, private and boutique condo set amongst lush greenery and a good low-density residential neighbourhood", he said.
SingLand's proposed scheme for the Farrer project will comprise some 100 units, mostly two-bedders of about 1,000 sq ft, with some smaller units (primarily one-bedders with a study). The project will have basement carparking and "good quality" specifications.
"Units on the sixth, seventh and eighth floors will have beautiful views of the Botanic Gardens. And the development will be close to Farrer Road MRT Station and amenities like HDB shops," he added.
The project could be launched in the first half of 2013. "We'll target singles, couples as well as investors; the development should appeal to expat tenants," he added. Older freehold condos with mostly larger apartments in the Holland-Farrer Road vicinity are selling at about $1,500-2,000 psf, he notes.
BT understands that SingLand's breakeven cost could be around $1,600 psf and it could be looking at an average selling price of about $1,800 psf.
However, analysts also point to substantial unsold stock in CapitaLand's nearby 99-year project, d'Leedon, which will pose competition and be a pricing constraint on any new development in the area. As at end-May, 503 of the d'Leedon's 1,715 units had been sold. The condo will rise to 36 storeys. Its developers sold 30 units in May at a median price of $1,484 psf, or at a range of $1,432-1,765 psf.
Market watchers also note that next door, GuocoLand has yet to release its freehold Leedon Residence.
SingLand's bid at yesterday's tender was 10 per cent higher than the next highest offer, of about $952 psf ppr by Singapore's Far East Organization. The Chng family's Eastwood Park bid $944 psf ppr.
Tang Boulevard (controlled by the Chiu family that controls Far East Holdings in Hong Kong) bid $908 psf ppr. BBR Property offered $856 psf ppr and Keppel Land unit Sherwood Development, $847.80 psf ppr.
Analysts have also noted the disparate performance at state tenders for private-housing sites in the past two months. A plot near Jurong East MRT station last month drew 12 bids with a massive $705 psf ppr top bid - a record for state land in the Outside Central Region. However, the next three tender closings - for sites located near Sengkang MRT Station/Compass Point; in Pasir Ris Drive 3; and about 100 metres from Buangkok MRT Station - each got just five bids each. However, winning bids for the Sengkang and Buangkok plots still show firm land prices at over $500 psf ppr.
Knight Frank's Mr Tan attributed the Jurong plot's popularity to hype about the Jurong Lake District as well as the over-30 storey height allowed for the plot. "This is also the first private-housing site in the Jurong Gateway commercial hub. On the other hand, in Buangkok, Sengkang, Punggol and Pasir Ris, there's a lot of supply - and complicated by the government releasing EC land in the vicinity. So developers have to be very careful about the quantum of the price premium over ECs," he added.
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