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Thread: Tan Quee Lan Street site underwhelms with two bids at tender close, one-north Gateway

  1. #1
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    Default Tan Quee Lan Street site underwhelms with two bids at tender close, one-north Gateway

    Tan Quee Lan Street site underwhelms with two bids at tender close, one-north Gateway site secures nine bids
    THU, SEP 05, 2019 - 11:17 PM
    NISHA [email protected]@Nisha_BT
    THREE Government Land Sale (GLS) tenders closed on Thursday, with a 99-year leasehold site at Tan Quee Lan Street securing only two bids while the site at one-north Gateway brought in nine bids. The third 99-year leasehold land parcel at Bernam Street in the Tanjong Pagar area drew four bids.

    The top bid for the Tan Quee Lan St site of S$800.19 million (S$1,535 per square foot per plot ratio) came from GuocoLand, Hong Leong Group and Hong Leong Investment Holdings. The second bid of S$768 million (S$1,473 psf ppr) was from Maximus Residential Sg and Maximus Commercial Sg (a tie up between City Developments Limited and MCL Land).

    At S$440.9 million (S$1,463 psf ppr), the highest bid for the Bernam St site came from Hao Yuan-linked HY Realty. MCL Land’s Vesta Sg Residences and Vesta Sg Comm put in the second highest bid of S$405.08 million (S$1,344 psf ppr) and Boo Han Holdings’ Laguna Garden and Far East Commercial Trustee slipped in the third highest bid of S$373.33 million (S$1,239 psf ppr).Meanwhile, the leading bid for the one-north Gateway site of S$155.74 million (S$1,001 psf ppr) came from TID Residential, while Kheng Leong’s Peak Vista submitted the second highest bid of S$153.55 million (S$987 psf ppr) and Laguna Garden had the third highest bid of S$151.78 million (S$976 psf ppr).

    Tricia Song, head of research (Singapore) for Colliers International, said: "We believe the lukewarm response to the Tan Quee Lan Street and Bernam Street sites potentially reflects developers’ concerns over the macroeconomic headwinds and weaker economic outlook ahead.”


    “Comparing the tender results of the three sites, it appears that the smaller the capital requirement, the higher the number of bidders,” said Nicholas Mak, head of research and consultancy for ERA Realty. “In addition, developers are also drawn to locations where there is very little competition.”

  2. #2
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    Default Re: Tan Quee Lan Street site underwhelms with two bids at tender close, one-north Gat

    Truly its underwhelming. I was expecting no less than 5 bids for this site or at least $1,700psf.

    Looks like GLL is cornering the market with Midtown and this one adding to their mix. Hope both designs will have some synergy due to its proximity and underground link.

    Likely launch price will be $2,600psf+ onwards? Smaller units are allowed in this site.

  3. #3
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    Default Re: Tan Quee Lan Street site underwhelms with two bids at tender close, one-north Gat

    Muted response to two Government Land Sale sites, but third site pulls in nine bids

    Observers say developers are cautious, likely to try for sites with less competition, or with lower quantum

    Fri, Sep 06, 2019


    AT THE close of three Government Land Sale (GLS) tenders on Thursday, a site in Tan Quee Lan Street in Bugis had secured only two bids, and one in Bernam Street in Tanjong Pagar, four bids.

    The third site in one-north Gateway, which required the least outlay, pulled in nine bids.

    All three are 99-year leasehold sites.

    Tricia Song, head of research (Singapore) for Colliers International, noted that the Tan Quee Lan Street site was widely anticipated to be hotly contested, and that some developers could have been deterred by expectations of aggressive bidding.

    She said: "There might also have been worries about competition from the Middle Road site and the Midtown Bay project." (The Middle Road site, sold to Wing Tai Holdings for nearly S$492 million, had landed 10 bids.)

    She added: "We believe the lukewarm response to the Tan Quee Lan Street and Bernam Street sites could be a reflection of developers' concerns about the macro-economic headwinds and weaker economic outlook ahead."

    Christine Li, Cushman & Wakefield's head of research (Singapore and South-east Asia), said that developers probably chose to err on the side of caution, in case the supply overhang is worsened by a possible recession in the next one year.

    Nicholas Mak, head of research and consultancy for ERA Realty, observed that, comparing the bids for the three sites, it would appear that the smaller the quantum, or capital requirement, the higher the number of bidders.

    "In addition, developers are drawn to locations where there is very little competition."

    Desmond Sim, CBRE's head of research (South-east Asia), said: "While the three sites are all residential with commercial components, they have different attributes in terms of location and plot sizes, and so have attracted developers with varying budgets and market-segment focus."

    The top bid for the Tan Quee Lan Street site of S$800.19 million (S$1,535 per square foot per plot ratio, or psf ppr) came from GuocoLand, Hong Leong Group and Hong Leong Investment Holdings.

    The only other bid of S$768 million (S$1,473 psf ppr) was from Maximus Residential Sg and Maximus Commercial Sg, a tie up between City Developments and MCL Land.

    Assuming a land cost of S$1,535 psf ppr, the breakeven price would work out to around S$2,200 psf, and could sell for around S$2,530 psf, based on a profit margin of 15 per cent, Ms Li estimated.

    For the Bernam Street site, the highest bid of S$440.9 million (S$1,463 psf ppr) came from Hao Yuan-linked HY Realty.

    MCL Land's Vesta Sg Residences and Vesta Sg Comm put in the next highest bid of S$405.08 million (S$1,344 psf ppr); Boo Han Holdings' Laguna Garden and Far East Commercial Trustee slipped in the third highest bid of S$373.33 million (S$1,239 psf ppr).

    JLL's senior director (research and consultancy) Ong Teck Hui described the top bid for the Bernam Street plot as lower than expected, despite its proximity to Tanjong Pagar MRT station, the future Prince Edward Road station and amenities in the area.

    He said: "The subject site is within the area under the CBD Incentive scheme, so more mixed commercial-residential redevelopments arising from the scheme would increase the supply of residential units in the vicinity, posing greater competition."

    Colliers estimates the breakeven to come in at between S$2,150 and S$2,200 psf, and suggested that the developer could build smaller units for city living.

    Other 99-year leasehold residential projects in the area - such as Altez, Skysuites@Anson and Icon - have transacted at S$1,700 to S$2,500 psf on average in the past 12 months, Ms Song noted.

    The leading bid for the one-north Gateway site, at S$155.74 million (S$1,001 psf ppr), came from TID Residential. Kheng Leong's Peak Vista submitted the second-highest bid of S$153.55 million (S$987 psf ppr), and Laguna Garden had the third highest bid of S$151.78 million (S$976 psf ppr).

    CBRE's Mr Sim said the keen interest in this site did not come as a surprise, owing to its "palatable size and strategic location near one-north".

    He added that the site, which can yield about 165 housing units, is located atop MRT tracks, which may affect the construction process and cost; it could be why an experienced developer like TID Residential put in a bid for it.

    Mr Mak pointed out: "There is no upcoming supply of new residential launches in one-north, meaning there would be very little competition for this project when it is launched for sale. Hence, there would be pent-up demand for new housing units in that area."

    The last GLS site that was sold in that area was a 22,195 sq m site in Margaret Drive. It was sold in December 2016 to MCL Land, and redeveloped into Margaret Ville, which was launched in 2018, he added.

    Mr Mak estimates that the top bid could translate to a break-even price of S$1,620 to S$1,680 psf.

    Ms Li, offering a reason for the robust response to the site, said that Grab and Razer's upcoming headquarters in one-north could spur demand for the units at one-north Gateway.

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