Another suburban residential site that is included in the reserve list of the Singaporean Government has been put up for sale, indicating increasing developer confidence.
Yesterday, an anonymous developer tendered the lowest acceptable bid amounting to $83.7 million (about $200 per square feet) for a 1.39-hectare plot located in Serangoon Avenue 3.
Property consultants foresee that bids will be coming in at higher levels, given that the site is strategically situated in an established residential locale and an MRT station is located nearby. The site is close to the MRT’s Lorong Chuan station and the Australian International School. The Urban Redevelopment Authority estimates that the site can accommodate 370 housing units in its 38,857-square-metre maximum gross floor area.
Chuan Park, The Springbloom and Chiltern Park are condominiums located near the 99-year leasehold site. Ho Eng Joo, the director of investment sales at Colliers International, anticipates that at least 10 developers will bid for the site.
“Sentiment is very strong and there are no sizeable private sites available for en bloc sales. Developers are thus going for the government sites as they need to replenish their land banks,” Mr. Ho said. He also explains that the strong demand resulting from the latest suburban launches shrunk the pipeline of such condominiums.
The managing director at Cushman & Wakefield, Donald Han, said that developers are currently in a more optimistic mood and are intending to stock up their land banks. “We have been seeing site after site being triggered since July; it shows that the reserve list is working and helping to provide a steady stream of supply,” Han explained.
Property consultant Nicholas Mak predicts that bids for the site at Serangoon Avenue 3 will probably range from $100 million ($240 per square feet per plot ratio) to $132 million ($315 per square feet per plot ratio). He forecasts that there will be 5 to 12 bidders.
Both Mr. Ho and Mr. Han are more optimistic regarding the price and are predicting that the bids will come as high as $400 per square feet and $350 per square feet, respectively.
With Mr. Ho and Mr. Han’s estimated bids, the break-even levels might range between $600 and $700 per square feet, and the developer whose bid will be chosen may look to put the new units up for sale at $750 to $850 per square feet each.
The plot at Serangoon Avenue 3, the fourth site for residential use put up for sale since August, is available for bidding through the reserve list system.
Last week, a bid for a suburban condominium plot located at Chestnut Avenue has drawn a notable total of 13 bids with highest being $280 per square feet of the gross floor area. The developers’ response is stronger than what is originally expected, given that the plot is situated at a relatively far distance from the closest LRT station.