Property developer Sim Lian has submitted a top bid of $302 million for a land parcel in Tampines.
Sim Lian led the land tender event, which included some other well-known developers like Frasers Centrepoint, Far East Organization, MCL Land and CapitaLand, as demand for residential land in the country continues to surge.
The company’s $302-million top bid for the 99-year leasehold site, which is located at the junction of Tampines Avenue 1 and 10, which works out to $421 psf ppr.
Analysts had earlier said that the land parcel could be priced between $300 and $460 psf ppr.
The second highest bid was $289 million, which was 4.3 percent behind Sim Lian’s bid, was a joint bid of Frasers Centrepoint and Far East Organization. It worked at around $403 psf ppr.
The 717,500 sq ft maximum gross floor area of the site can accommodate 600 housing units, making it the biggest residential site up for sale in the first half of 2010.
“The tender for the condominium site at Tampines Avenue 1 is another demonstration of developers’ interest in the mass-market segment,” said Joseph Tan, executive director for residential at CB Richard Ellis. “Of the eight bids submitted, the first six bids were very close to each other.”
One developer noted that all bids for the site were “sensible”, and the “let’s get it at all costs” approach is beginning to wear off following the government’s announcement to release more land sites by the second half of the year.
According to Mr. Tan, with the top bid of $421 psf ppr, a new project for the site will break even at around $700 psf.
Mr. Tan added that caveats lodged for transactions in Bedok Reservoir area, like the Waterfront Waves and Waterfront Key projects, ranged from $700 to $850 psf in the past five months. When the new project is ready for launched in the next six to eight months, its price could be even higher or just in the same range.
Donald Han, managing director of Cushman & Wakefield, noted that residential units for the site could go for as high as $800 psf. He factored the construction cost of about $300-$320 psf.
“Sim Lian is also a contractor so that means they have a better control over the construction cost,” said Mr. Han.