TODAY: Still hungry for land

Still hungry for land

by Ephraim Seow | Aug 25

SINGAPORE - A residential site on Miltonia Close, next to the Orchid Country Club, attracted seven bids by the close of the public tender yesterday, in an indication that property developers still have a healthy appetite for land, property analysts said.

Hoi Hup Realty and Sunway Developments jointly submitted the highest bid of $165 million, which translates to about $406 per square foot per plot ratio. This is about 31-per-cent higher than the next highest bid at $126 million submitted by Master Contract Services.

The remaining bids, ranging from $97.9 million to $125.3 million, came from developers like Allgreen and MCL Land unit Superport.

On Hoi Hup's bullish top bid, Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the developer had failed at least eight times in other tenders since the beginning of the year and hence might have had a greater need to build up its land bank.

The Miltonia Close site was launched by the Housing and Development Board (HDB) on July 2. The land parcel spans 291,000 sq ft and can yield a maximum gross floor area of about 407,000 sq ft.

With a 99-year lease term, the site can be developed into strata landed housing, condominium housing or flats.

Mr Leonard Tay, director of CBRE Research, noted that the site's good location beside the Orchid Country Club Golf Course would offer an unblocked view of Lower Seletar Reservoir. It is also close to Yishun HDB town.

He added the winning developer would likely develop a five-storey low-rise condominium.

Mr Tay said the top bid reflected a breakeven cost of around $700 to $750 psf should a low-rise condominium be built.

"Condominium units in this new project could possibly sell above $800 psf," he said.

This would put it at the higher end of recently transacted prices in the area from April to this month. Units in The Estuary, which was launched in April, sold for $650 to $850 psf, Mr Tay said.