Bidders subdued at auction of 8 plots

Source : Straits Times - 22 Aug 2008

AN AUCTION of eight small plots of state land yesterday attracted 50 registered bidders and many more onlookers but only half the sites were sold.

The subdued response reflects the mood in the property market, said observers, and is in contrast to a similar auction last November when all six plots offered were sold after brisk bidding.

Yesterday’s sale was the second held so far by the Singapore Land Authority (SLA), which is offloading residential ‘infill’ sites with fresh 99-year leases.

These are vacant pockets of state land located in the midst of established landed housing estates. They were either left untouched by nearby developments or were once used for public purposes.

Knight Frank auctioneer Mary Sai, who conducted the auction, said potential bidders were very cautious: ‘We heard the interest there but when they heard the starting bid, they refrained from bidding.’

Ms Sai said the bidders likely did not expect the opening price to be so high while site constraints and high construction costs might be dampening interest.

Take a site in Upper East Coast Road. It opened with a bid of $2.47 million or $334 per sq ft (psf) but there were no takers. It was reintroduced later at a starting bid of $2.1 million and attracted some bids but they failed to meet the reserve price and it was passed.

SLA’s reserve price, which is set by the chief valuer and not revealed to bidders, is slightly below the opening bid.

But there were some bright spots. The biggest plot on the list - a 15,461 sq ft good-class bungalow site in Ridout Road - was the most hotly contested property with 34 bids lodged by three hopefuls.

BreadTalk founder and chairman George Quek and his wife clinched the site with a bid of $8.96 million or $579.55 psf. This was 22.6 per cent above the opening bid of $7.31 million or $473 psf.

This site is right next to Mr Quek’s home and the family had been renting a portion of it for use as a garden for over two years.

Mr Quek said he will combine the land with his own.

The lowest-priced lot sold was a 4,720 sq ft site in Glasgow Road, near Rosyth Road, which is suitable for a three-storey bungalow. Mr Anthony Tan, 62, bought it for $710,000 or $150.40 psf - close to the starting bid of $680,000 or $144 psf.

‘It’s where my wife used to live and my daughter was born,’ said the retiree. He will build a single- storey house on the site but will continue to stay in his Serangoon Gardens house.

A 4,357 sq ft corner plot in Tanah Merah Kechil Road began with a bid of $1.36 million or $312 psf before going to Mr Ng Kim Hoe for $1.51 million or $347 psf. He had only one competitor.

Ms Martha Lim, 31, who runs her family business Lim Seng Kok Contractor, bought a 7,771 sq ft Namly Avenue plot for $2.63 million or $338 psf.

The bidding opened at $2.55 million. Ms Lim said she may keep the site for her own use or redevelop it for sale.

Yesterday, there were some bargain hunters among the crowd of about 200 at M Hotel. Others such as a resident in Ridout Road were there to see if the plot in the street sold.

SLA may release the unsold sites again after researching price levels.

Its deputy director of land sales, Mr Teo Jing Kok, said yesterday that the agency would work with the chief valuer to see if the prices are too high.

And there will be more of such auctions to come, he said. ‘We are looking at one or two land sale auctions a year, assuming there’s no downturn.’