Sembawang condo site draws nine bids

[reporter2]

http://www.straitstimes.com/business...raws-nine-bids

Sembawang condo site draws nine bids

Apr 8, 2016

Rennie Whang


A Jalan Kandis condo site near Sembawang Park attracted nine bids yesterday in keen competition reflecting the affordable nature of the land.

Dillenia Land, a unit of Tuan Sing Holdings, submitted the top bid of about $51.1 million, or $481 per sq ft per plot ratio, for the 0.7ha plot.

This was just 1.8 per cent higher than the second-highest bid of $50.2 million by Qingjian Realty (Residential).

The relatively small plot size and and small number of units it will likely yield - about 110 - mean development risks will be lower, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia. A competitively priced project on the site would probably sell well, so a developer should have less fear about penalties for unsold units, Mr Sim added.

While the tender drew some smaller players, major developers also participated, including Malaysian tycoon Robert Kuok's Allgreen Properties.

The third-highest bidder, China's Nanshan Group, entered the Singapore market about three years ago and seems intent on acquiring more residential sites. It launched its maiden private condo project, Thomson Impressions, in October last year.

The total development cost for a project on the Jalan Kandis site is likely to be below $100 million. Units should be priced at $1,000 psf or lower to sell well, based on market conditions now, said Mr Ong Teck Hui, JLL national research director.

Buyers could include upgraders from nearby estates in the Sembawang and Canberra area, he said.

"Although the site is not near transportation nodes or amenities, it is still attractive, being in a predominantly landed housing estate surrounded by greenery."

Many bidders for the site have been regularly participating in GLS tenders, said Mr Lee Liat Yeang, Rodyk & Davidson partner in real estate practice. "Many developers need fresh land for development to keep their businesses going... There are also fewer GLS land tender sales this year compared with last year or 2014," he said.

Tuan Sing chief financial officer Chong Chou Yuen noted after yesterday's tender closing that while the company has land bank in China and Perth, it has none left in Singapore. "As a Singapore-based company, we would still like to have trading properties here and we think our bid price is fair," he told The Straits Times.

[reporter2]

http://www.businesstimes.com.sg/real...rk-site-tender

Digestible plot size helps draw bids for Sembawang Park site tender

Tuan Sing's S$481 psf ppr tops nine bids submitted and is slightly above market expectations

By Kalpana Rashiwala

[email protected]

@KalpanaBT

Apr 8, 2016


A RELATIVELY small land size, affordable lumpsum investment and the absence of competition in the locale helped a 99-year leasehold private housing site near Sembawang Park to attract nine bids at a state tender that closed on Thursday.

The top bid was also slightly above the higher end of market expectations. Tuan Sing Holdings' fully-owned unit Dillenia Land placed the highest bid of S$51.07 million, which works out to S$481 per square foot per plot ratio (psf ppr). Property consultants had earlier predicted a winning bid of up to S$470 psf ppr for the 0.7-hectare site along Jalan Kandis.

The plot can be developed into a part-three storey and part-seven storey project.

Tuan Sing's bid was just 1.8 per cent above the second highest offer of about S$473 psf ppr, which came from Qingjian Realty (Residential).

William Liem, chief executive of Tuan Sing Holdings, told The Business Times that the group's scheme for the proposed project on the site envisages about 130-140 units (two bedrooms and larger units) targeted primarily at families. "This will be an exclusive project in a quiet, green estate near the water. We hope to launch by year-end - if we can get all the approvals from the authorities," he added.

The average selling price is expected to be in the region of S$1,000-1,100 psf.

Desmond Sim, head of CBRE Research for Singapore and South-east Asia, said: "When completed, this will be the only non-landed project within a two-km radius in a precinct that is predominantly landed. The relatively small plot size and the small number of units it will yield mean that risks remain manageable. If priced competitively, the proposed development could enjoy a high rate of success."

Giving his take, JLL national director Ong Teck Hui said: "To be saleable, the units would have to be priced around S$1,000 psf or less based on current market conditions. Buyers would be those who would not mind the outlying location of the site and could include upgraders from the nearby estates in the Sembawang and Canberra area.

"Although the site is not near transportation nodes or amenities, it is still attractive - being in a predominantly landed housing estate surrounded by greenery, including Sembawang Park."

Given the S$51 million land price, the total development cost for Tuan Sing is likely to come in below S$100 million. "There are lower risks associated with the affordable absolute land price, low total development cost and manageable number of units to market," Mr Ong noted.

In similar vein, Mr Sim added: "The palatable quantum offsets the challenges of this untested site, which is probably the reason for the strong showing by the bidders."

Also bidding for the site were Nanshan Group Singapore Co, KSH Development, Allgreen Properties and TA Corporation. The lowest bid, of S$22.89 million or about S$216 psf ppr came from Wee Hur Development.

The tender was conducted by the Urban Redevelopment Authority.

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