Surprisingly bullish bids swamp year's first housing land tender

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http://www.propertyguru.com.sg/prope...s-174m-top-bid

Perumal Road site attracts $174m top bid

Romesh Navaratnarajah • January 10, 2017


Aerial view of the land parcel at Perumal Road. (Photo: URA)

A residential with first storey commercial site at Perumal Road in Litte India attracted strong interest from developers, with 11 bids submitted at the close of its public tender on Tuesday (10 February), revealed the Urban Redevelopment Authority (URA).

Low Keng Huat (Singapore) submitted the top bid of $174.08 million for the 0.38ha site. The price works out to about $1,000 psf on the gross floor area. The second-highest bid of $166.7 million came from China Construction (South Pacific) Development, while Hotel Grand Central offered the lowest bid of $90.89 million.

Launched for sale on 29 November 2016, the 99-year leasehold site could yield about 200 homes.

Desmond Sim, Head, CBRE Research, Singapore and South East Asia, said: “The shortage of residential land sites is being keenly felt by developers, going by the tender results of the first GLS land tender for the year. Developers are clearly looking to replenish their depleting inventory and the Perumal plot offers the added bonus of a small size and therefore an affordable quantum of $174 million.

“The site benefits from its proximity to transport nodes – the Dhoby Ghaut Interchange is only two stops away. Other amenities nearby include the relatively new One Farrer Hotel, Farrer Park Medical Hospital and City Square Mall.”

A decision on the award of the tender will be made after the bids have been evaluated, said the URA.

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http://www.businesstimes.com.sg/real...t-perumal-road

Low Keng Huat makes highest bid for popular site at Perumal Road

Tuesday, January 10, 2017

by Lee Meixian
[email protected]
@LeeMeixianBT


CONSTRUCTION firm Low Keng Huat (Singapore) Limited has put in the highest bid for a residential site with first-storey commercial space at Perumal Road.

At a tendered sale price of S$174.08 million, it translates to a very bullish S$1,000.72 per square foot per plot ratio (psf ppr), greatly surpassing some consultants' expectations of bids ranging from S$800 to S$850 psf ppr.

This was according to an announcement by the Urban Redevelopment Authority (URA) on Tuesday.

The number of bidders at 11 also exceeded the 7-10 bidders that consultants were expecting.

China Construction (South Pacific) Development came in second with a bid of S$166.7 million or S$958.29 psf ppr. Allgreen Properties came in third with a bid of S$161.5 million or S$928.4 psf ppr.

The site at Perumal Road was launched for public tender on Nov 29, 2016. The site was offered for sale on a 99-year lease term under the second half 2016 Government Land Sales programme. With a maximum gross floor area of 16,161 square metres, it can yield about 200 units.

The site enjoys good transport connectivity with its location right beside Farrer Park MRT station. There is also accessibility to the Central Expressway and Pan Island Expressway for private transport, as well as commercial amenities such as City Square Mall, Mustafa Centre, Farrer Park Hospital and Medical Centre, and the upcoming Centrium Square.

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http://www.straitstimes.com/business...ad-land-tender

Bullish bids in Perumal Road land tender

Jan 11, 2017

Aggressive offers a sign of developers' hunger for sites

Wong Siew Ying


The bullish bids lodged for a plot in Perumal Road are a clear sign developers remain hungry for sites.

The land attracted 11 bids with an offer of $174.08 million from Low Keng Huat leading the pack, the Urban Redevelopment Authority said yesterday.

Its bid was about 4.4 per cent higher than the $166.7 million tabled by China Construction (South Pacific) Development.

The Perumal Road site - with room for 200 private apartments and commercial space on the first floor - was expected to garner keen interest when it was released for sale last November.

"Developers are clearly looking to replenish their depleting inventory and the Perumal Road plot offers the added bonus of a small size and, therefore, an affordable quantum of $174 million," noted Mr Desmond Sim, head of CBRE Research for Singapore and South-east Asia.

The 99-year leasehold plot has a land area of 3,847.8 sq m and maximum gross floor area of 16,161 sq m.

Developers have been more aggressive with bids in recent years as the Government has cut the supply of development sites to stabilise the property market.

Cushman & Wakefield research director Christine Li noted that the top bidders continue to place above-market offers in order to have a "sure-win" at government tenders.

"It is noteworthy that out of the 11 parties who tendered for the site, nine bid higher than the top bid for the nearby site (Sturdee Residences) in March 2015," Ms Li added.

The leading bid from Low Keng Huat of $1,000.7 per square foot per plot ratio (psf ppr) for the Perumal Road site is 27 per cent higher than the $787 psf ppr lodged for the Sturdee Residences plot.

Consultancy JLL noted that the bullish bidding reflects "a positive market outlook" among developers amid rising transaction volumes and a slower pace of decline in home prices.

The postponement of the sales launch for the confirmed-list site in Upper Serangoon Road last month may also have resulted in some spillover interest in the Perumal Road plot.

The site is near the Farrer Park MRT station and commercial amenities such as City Square Mall and Mustafa Centre.

"The private residential market is showing signs of stabilising and may very possibly recover by 2018. This would coincide well with the launch of the Perumal project," said Mr Wong Xian Yang, head of research and consultancy at OrangeTee.

Analysts put the potential average selling price for units at above $1,700 psf, based on the high land price submitted.

The URA said a decision on awarding of the tender will be announced at a later date.

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http://www.businesstimes.com.sg/real...ng-land-tender

Surprisingly bullish bids swamp year's first housing land tender

High prices, strong showing by construction companies point to need for landbank and market optimism

Wednesday, January 11, 2017

by Lee Meixian
[email protected]
@LeeMeixianBT


BULLISH bids poured in for the first tender closing of 2017. But property consultants can't decide among themselves if it is a sign of market optimism or developers' need for work.

Construction company Low Keng Huat beat 10 other competitors with its unexpectedly bullish bid for a residential site along Perumal Road which comes with first-storey commercial space.

At a tendered sale price of S$174.08 million, it translates to S$1,000.72 per square foot per plot ratio (psf ppr), greatly surpassing some consultants' expectations of bids ranging from S$800 to S$850 psf ppr.

When contacted, Low Keng Huat declined to comment on its plans for the plot of land for now. Its share price added half a cent to finish at S$0.565 on Tuesday.

China Construction (South Pacific) Development came in second with a bid of S$166.7 million or S$958.29 psf ppr. Allgreen Properties came in third with a bid of S$161.5 million or S$928.4 psf ppr.

Competition was more crowded than consultants had expected. At 11 bidders, it exceeded the seven to 10 bidders that most were expecting. Many of the bidders were small and medium-sized developers and construction-backed contractors.

JLL national director of research and consultancy Ong Teck Hui said the "bullish bidding" reflects a positive market outlook. Bidders could have been encouraged by the higher transaction volume and moderating price declines in the property market.

"At S$1,001 psf ppr, the top bid is optimistic, exceeding the S$787 psf ppr paid for the (nearby) Sturdee Residences site by 27 per cent (in March 2015)."

He attributed this to the subject site's closer proximity to Farrer Park MRT, and cost savings that contractor-developers enjoy, such that they can afford to bid higher.

The strong participation by 11 bidders was also a sign of contractor-developers' need to secure fresh development opportunities, he added.

Agreeing, Desmond Sim, head of CBRE Research, Singapore and Southeast Asia, said: "Developers are clearly looking to replenish their depleting inventory and the Perumal plot offers the added bonus of a small size and therefore an affordable quantum of S$174 million."

SLP International executive director Nicholas Mak noted that in terms of psf ppr, the top bid was the second highest among all the submitted bids for government land sales residential sites since 2009 in the Rest of Central (or city fringe) region.

"Such a high land price and strong participation rate among developers indicate their urgent need to replenish their land bank. It could also indicate that some developers are betting on the government relaxing the cooling measures in the near future."

Either that, or at least an imminent price recovery. Cushman & Wakefield research director Christine Li said the exuberance displayed by the bidders is not congruent with market performance, which showed private home prices falling 3 per cent in 2016 (according to latest flash estimates), after falling 3.7 per cent in 2015.

"This may imply that more developers are expecting prices to bottom out in 2017 and will see prices increase from 2018 onwards when the project is ready for launch," she said.

She expects the winner of the site to launch the project at S$1,700 to S$1,750 psf. She too agrees that developers' hunger for residential sites are driving them to place above-market bids at land tenders to guarantee themselves a "sure-win".

The site at Perumal Road was offered for sale on a 99-year lease term under the second half 2016 government land sales programme. With a maximum gross floor area of 16,161 square metres, it can yield about 200 units and about 500 square metres of commercial space.

Located right beside Farrer Park MRT station, the site is also accessible to the Central Expressway and Pan Island Expressway for private transport, as well as commercial amenities such as City Square Mall, Mustafa Centre, Farrer Park Hospital and Medical Centre, One Farrer Hotel and the upcoming Centrium Square.