Source : Straits Times – 6 Nov 2009
A CONDOMINIUM plot in Upper Thomson Road has attracted a much higher-than-expected bid from a mystery developer, even though the number of bids was well below recent levels.
Treasure Well Investments, whose parent company is Total Wonder Holdings – both unknown names here – put in a bid of $251.34 million, the Urban Redevelopment Authority (URA) said.
That far exceeds the $82 million trigger bid or $174 per sq ft set by URA for the 2.1ha 99-year leasehold site. It works out to $533 psf of gross floor area, a price that consultants said was aggressive.
The site can be developed into a condo of up to 20 storeys with about 400 units.
This highest bid was also 21 per cent above the second-highest bid of $206.8 million or $439 psf of gross floor area from Far East’s Tuas Hi-Tech Park.
The other bidders were Sim Lian Land, Frasers Centrepoint, Chip Eng Seng’s CEL Development and GuocoLand’s First Changi Development.
The plot, near Lower Peirce Reservoir Park and Bishan Park, was triggered for sale after an unnamed developer committed to bid at least $82 million for the site.
Property consultants suspect the top bidder could be a foreign player.
Many industry players were scrambling to uncover the identity of the bidder at the Real Estate Developers’ Association of Singapore’s 50th anniversary dinner yesterday evening.
Whoever is behind the top bid, the figures mean that it may have to sell the apartments for about $1,000 psf or more, they said. The site is not near an MRT station, though it has its appeal.
‘Although the site gets the afternoon sun, it does overlook a beautiful golf course and would thus offer great views,’ said Mr Ho Eng Joo, Colliers International’s executive director (investment sales).
Based on the top bid, the break-even price would be about $800 to $900 psf of potential gross floor area, he said.
CBRE Research executive director Li Hiaw Ho had said in late September that the site was likely to sell for between $375 psf and $425 psf per plot ratio. The developer would be set to launch the project at $800 psf to $850 psf, he added.
Mr Li had expected the site – which has a full view of the Island Golf Course and Lower Peirce Reservoir – to be hotly contested, considering the strong showing at recent tender exercises.
But this time, only six developers joined the tender, less than half the usual number of bids seen in recent tenders.
‘The relatively smaller number of bids suggests developers are cautious, in anticipation of the announcement of the government land sales programme,’ said Knight Frank chairman Tan Tiong Cheng.
The Government said in September that it will be pushing out ‘confirmed list’ sites, as part of a package of measures to calm the fast-rising market then.
These are sites that are offered irrespective of prior expressions of interest.
But the number and location of these sites have yet to be unveiled.
‘This tender would be one of the first few cases that suggest the recent government measures have had some bearing on market behaviour, and that there is some cautiousness in the market,’ said Jones Lang LaSalle’s head of research, South-east Asia, Dr Chua Yang Liang.
Some experts said the recent slowdown in the market for new private homes could have dampened demand for this site. There were fewer home sales last month than in previous months.
‘The fear could be that take-up rate may continue to fall,’ said Colliers’ Mr Ho. If that happens, buying sentiment could be affected and thereafter, possibly prices, experts said.
Dr Chua believes the rate of rise in private home prices may slow, but they are unlikely to fall. ‘At the moment, there’s a certain momentum in the market, so we do not expect a turn in prices in the immediate future,’ he said.
FEWER BIDS
‘The relatively smaller number of bids suggests developers are cautious, in anticipation of the announcement of the government land sales programme.’ – Knight Frank chairman Tan Tiong Cheng
MEASURES WORKING
‘This tender would be one of the first few cases that suggest the recent government measures have had some bearing on market behaviour and that there is some cautiousness in the market.’ – Jones Lang LaSalle’s head of research, South-east Asia, Dr Chua Yang Liang
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