Bullish bid tops 16-way tussle for prime Jalan Besar site

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Bullish bid tops 16-way tussle for prime Jalan Besar site

Published on Mar 25, 2015 2:38 AM

By Cheryl Ong


A PLUM residential site in Sturdee Road has beaten analyst expectations - and the sombre market mood - by attracting a top bid of $181.2 million in a 16-way battle royale among developers.

Analysts had expected keen interest for the 65,784 sq ft parcel off Jalan Besar because of its size and location but the leading offer trumped predictions that the price would come in between $138 million and $166 million.

The number of bids also surprised. The last time a Government Land Sales (GLS) tender attracted more bids was in October, when 18 developers vied for a site in Lorong Puntong.

SL Capital (1), a unit of Sustained Land, lodged the highest bid for the Sturdee Road plot, at $787 per sq ft (psf) per plot ratio (ppr). That was 7.3 per cent more than Singland Homes, a unit of Singapore Land, at $168.8 million - or $733 psf ppr.

Wee Hur Development was third with $161.9 million - or $703 psf ppr - while City Developments unit Verwood Holdings, Hong Leong Holdings' Intrepid Investments and TID Residential were next on $160 million - or $695 psf ppr.

"It reflects the bidders' confidence that, in spite of the current market slowdown, a project at the doorstep of the city, surrounded by abundant amenities, would be in demand, and do well," said Mr Ong Teck Hui, national director of research and consultancy at JLL.

A limited supply of new homes in the area could be another draw for developers, he added.

The last GLS site in the area, in Bendemeer Road, was bagged by United Engineers for $543 million in 2011. The 862-unit Eight Riversuites condominium is now being built on the plot.

The Sturdee Road site is near City Square Mall and Farrer Park MRT station, and can be developed into a 30-storey project with about 265 homes. It is the first of six sites to be sold under the GLS programme for the first half of the year.

The funds needed to develop the "relatively small" project would therefore be "lower" compared with a larger site, said Mr Nicholas Mak, executive director at SLP International. "The risk would also be lower and the site would be attractive to a wider range of developers," he added.

The estimated break-even price for the new condo on the site is expected to be between $1,260 psf and $1,310 psf.

CBRE Southeast Asia research head Desmond Sim said he expects demand for the upcoming development to be underpinned by its proximity to the city.

The site is near Little India and the neighbourhood is becoming "trendier, with chic retail and F&B offerings", he added.

"Investors are likely to be keen on such a location due to the potential growth in leasing demand," said Mr Ong.

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Bite-sized city-fringe condo site draws 16 bids

Sustained Land's S$787 psf ppr top bid exceeds forecasts; group plans 306-unit condo on plot in commercial enclave

By Kalpana Rashiwala

[email protected]@KalpanaBT

25 Mar


A 99-YEAR private condominium site at Sturdee Road drew a whopping 16 bids, with a wide pool of developers keen on the bite-sized offering in an attractive city-fringe location near City Square Mall, Farrer Park MRT Station and other amenities.

The top bid by Sustained Land unit SL Capital (1) Pte Ltd - of nearly S$181.19 million or S$786.92 per square foot per plot ratio (psf ppr) - however, was above the range of forecasts made earlier by four property consultants polled by The Business Times.

When the site was launched last month by the Urban Redevelopment Authority, they had predicted that the winning bid would be somewhere in the S$600-S$750 psf ppr range.

Sustained Land's top bid was 7.3 per cent higher than the second highest bid of S$168.80 million or S$733.11 psf ppr placed by Singapore Land unit Singland Homes.

Sustained Land was also the top bidder at a January 2014 state tender for a smallish plot a stone's throw from Aljunied MRT Station. That tender too drew 16 bids.

Sustained Land's winning bid was S$776 psf ppr. It has partnered MCC Land and Great View Development to develop the site into TRE Residences, a 250-unit project. Since the project's release last November and up to the end of last month, the developers had sold only 56 units. The median price achieved in the launch month last November was S$1,588 psf.

When contacted on Tuesday evening, Sustained Land director Douglas Ong told BT that the group may take in partners for the proposed Sturdee Road project. The plan is to build a 30-storey condo with 306 units - ranging from studios to four-bedroom apartments. Units will mostly be smallish, he acknowledged. "We could launch the project near the end of the year or early next year."

The breakeven cost would be around S$1,200-S$1,300 psf.

"We are happy with this site, it is near City Square Mall and our proposed high-rise project will offer good views since we are surrounded mostly by shophouses," said Mr Ong.

Desmond Sim, head of Singapore and SE Asia research at CBRE, said the site is close to the CBD, and the vicinity is becoming more trendy with chic retail, and food and beverage offerings. JLL national director Ong Teck Hui said the land parcel is surrounded by a throbbing commercial enclave, recently boosted by the medical facilities at Connexion.

"Investors are likely to be keen in such a location due to the potential growth in leasing demand. The keen interest in the subject site could also be due to the limited supply of new homes in the vicinity. Eight Riversuites, which is further away at Bendemeer Road, was the last Government Land Sales site sold in the area, in 2011," Mr Ong added.

SLP International executive director Nicholas Mak said that the relatively small project on the Sturdee Road site, entailing a lower quantum of funds to develop and a smaller risk, made it appealing to a wider spectrum of developers.

Wee Hur Development was in the third position with a bid of about S$703 psf ppr. Units of City Developments, Hong Leong Holdings and TID teamed up to offer S$695 psf ppr for the site.

Meterorite Land Singapore, a unit of Hiap Hoe Ltd, priced the site at S$657 psf ppr. EL Development offered S$652 psf ppr and Tuan Sing-owned Episcia Land, S$651 psf ppr.

Also participating in the tender was a joint venture between Sing Holdings and Maxdin, which offered S$646 psf ppr.

Chip Eng Seng, through CEL Residential Development, offered S$623 psf ppr. Sing Haiyi Group's Phoenix 99 bid S$593.56 psf ppr.

Also participating the tender were Amara Holdings' TTH Development (S$571 psf ppr) and Soilbuild Group (S$500 psf ppr). First Shine Properties, controlled by Hock Lian Seng Holdings, partnered TA Corporation unit Sino Holdings, for a nearly S$464 psf ppr bid.

The lowest bid, from NSS Sturdee, was S$345.28 psf ppr. The company lists Ng Teng Yeng (brother of Far East Organization founder Ng Teng Fong) among its directors and its shareholders include Affluence Resource and We Realty.