Caution reigns at state land tenders, despite developers’ low unsold private housing inventory

by Albert02

Caution reigns at state land tenders, despite developers’ low unsold private housing inventory

Caution reigns at state land tenders, despite developers’ low unsold private housing inventory. The recent GLS tender closings for two 99-year leasehold private housing sites near the Beauty World and Hillview MRT stations were met with skepticism. The number of offers received was smaller than the market expected. However, the highest bids for both plots were within the range of estimates provided by property consultants polled by The Business Times prior to the bidding for the two sites closing on Thursday.

Four submissions were received for the Hillview Rise site, which has the ability to house 335 people. Far East Organization and Sekisui House collaborated to submit the winning bid of S$320.78 million, or nearly S$1,000 per square foot per plot ratio. Five bids were received for a site near the Beauty World MRT station on Bukit Timah Link. Bukit Sembawang Estates’ highest bid of S$200 million, or S$1,343.13 per square foot per year, was 15.7% higher than Wing Tai’s second-highest bid.

“It was expected that the Bukit Timah Link property, which is relatively small and thus less hazardous,” said Ong Teck Hui, senior director of research and consultancy at JLL Singapore. The winning bid, on the other hand, was significantly more optimistic than the losing proposal. While the inventory of unsold units remains low and developers need to replenish their land banks, there appears to be more caution in bidding for sites in light of rising interest rates, the consequences of recent cooling measures, and macroeconomic uncertainty.”

ERA Realty Network’s head of research and consultancy, Nicholas Mak, also pointed out that the maximum bid of S$1,023.85 psf ppr for the Hillview Rise site is lower than the S$1,068 psf ppr land rate paid for the neighboring Midwood condo site in 2018. “The Midwood and Hillview Rise sites are only about 230 meters apart,” Mak pointed out.

The highest bid for the current Hillview Rise site, S$1,023.85 psf ppr, was only 1.3 percent higher than City Developments’ second-highest bid. According to Edmund Tie’s head of research and consulting, Lam Chern Woon, one reason for the relatively close bids for this site could be that developers are concerned about supply and price competition from the future development on the Dairy Farm Walk site, which was awarded in March this year at a significantly lower S$980 psf ppr.

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Source:
https://www.businesstimes.com.sg/real-estate/caution-reigns-at-state-land-tenders-despite-developers-low-unsold-private-housing


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