Tan Quee Lan Street site expected to grab developers' attention

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URA launches Bugis site, postpones tender of One-North parcel

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[reporter2]

Tan Quee Lan Street site expected to grab developers' attention

Analysts expect 10 to 12 bids for the site located right in the heart of Bugis, an area in the midst of rejuvenation and next to Bugis MRT station

Sat, Mar 30, 2019


THE Urban Redevelopment Authority (URA) has launched the tender of a site on Tan Quee Lan Street under the Confirmed List of the first half 2019 Government Land Sales (GLS) programme which is expected to attract keen interest from developers owing to its location.

The 99-year leasehold site sits on an area of 11,530.9 square metres and has a maximum gross floor area (GFA) of 48,430 sq m. It can potentially yield up to 580 residential units while a maximum of 2,000 sq m of the total GFA can be used for commercial use on the first storey.

Tay Huey Ying, JLL's head of research and consultancy (Singapore), said: "The Tan Quee Lan Street site is assessed to be the most attractive of all the sites on the H1 2019 GLS confirmed list as it is located next to the Bugis MRT station and right in the heart of Bugis where the government's plan for its rejuvenation is fast bearing fruit."

Tricia Song, head of research (Singapore), at Colliers International, expects the tender to "set benchmark land pricing for a residential site" in the area. She added: "The Tan Quee Lan Street site will not be subject to the rule on minimum unit size as it is located in the Central Area. This would give the developer a freer hand in crafting the unit-mix at the future development.

Analysts expect between eight and 12 bids for the site, pointing to the nearby Middle Road site which closed on Thursday. The Middle Road site drew 10 bids, with Wing Tai's highest bid of nearly S$492 million or about S$1,458 per square foot per plot ratio (psf ppr) clinching the site.

Ms Song projects a potential top bid of S$834 million, which works out to S$1,600 psf ppr - about 10 per cent more than the top bid for the Middle Road site as The Tan Quee Lan site "is in an arguably more attractive location and more units could be built". The Middle Road site can yield 375 units.

A reasonable top bid could be in the range of S$750 million to S$800 million, or S$1,439 to S$1,535 psf ppr, ZACD Group head of research & consultancy, Nicholas Mak reckons.

Mr Mak added: "The proximity to the MRT station may pose challenges (to) construction. The developer would incur higher construction cost to develop the subject site compared to the Middle Road site. Developers will have to take into consideration potentially higher construction costs when determining land bids in order to set achievable selling prices while maintaining targeted profit margins."

The tender for the Tan Quee Lan Street site will close at 12 noon on Sept 5. Its closing will be batched with another site at Bernam Street which is scheduled for sale in May under the first half 2019 GLS programme.

Meanwhile, the tender for a residential site at one-north Gateway under the Confirmed List, which was originally scheduled for this month, will be postponed to June.

JLL noted that the Master Plan zoning for the one-north Gateway site has been changed from full-residential to residential with commercial at first storey. Ms Tay reckons that the delay in the tender launch for the one-north Gateway site was likely to "allow the authority to incorporate this change into the tender conditions and documents".

Separately, JTC has awarded the tender for an industrial site at Tuas South Link 3 to chemicals distributor Transmare-Chemie for S$2.05 million. The tender for the site was launched on Nov 27 and closed on Jan 22, with just one bid submitted.

The 4,456 sq m site has a tenure of 20 years and a gross plot ratio of 1.4. The project is expected to be completed in five years.

The tender for an industrial site at Jalan Papan will not be awarded as it received only one bid, which was below the reserve price, said JTC. That tender was launched on Dec 26 and closed on Feb 20.