Hong Leong Holdings, GuocoLand JV is sole bidder for Berlayar Drive condo site

[SINGAPORE] A tie-up between Hong Leong Holdings unit Intrepid Investments and GuocoLand was the sole bidder for a condo plot on the former Keppel Club site on Tuesday (Aug 4).

Its bid of S$576.78 million works out to S$1,515 per square foot per plot ratio (psf ppr) for the 99-year leasehold site in Berlayar Drive.

The 271,931 square foot Berlayar Drive site, about 330 metres from the Telok Blangah MRT station on the Circle Line, can yield about 415 private homes.

Analysts polled by The Business Times had predicted anywhere from two to eight bids for the site. The forecasts for the top bid ranged from S$1,100 psf ppr to S$1,600 psf ppr.

This is the second government land sales (GLS) site released in the new Berlayar housing estate, which is coming up on the former Keppel Club site.

The maiden GLS site in Berlayar estate fetched S$918.3 million or S$1,326 psf ppr at a state tender in November last year.

The tender drew three bids. Kingsford Group was awarded the site, which is on Telok Blangah Road and can yield about 745 private homes.

Drawbacks

The latest plot, in Berlayar Drive, is within walking distance to an MRT station, one stop from VivoCity, and near the sea and greenery. However, there is a lack of schools and large-scale retail amenities in the immediate vicinity.

Moreover, the low 1.4 plot ratio (ratio of maximum gross floor area to site area) and five-storey height limit for the land parcel may have caused some developers to stay away from Tuesday’s state tender.

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In contrast, the maiden plot in Berlayar estate that went to Kingsford last year is earmarked for a high-rise project. It has a 4.7 plot ratio.

Developers keen on developing private homes in the Berlayar estate may be saving dry powder for the third GLS site in the estate that will be launched in December.

It can yield 695 private homes and has a 2.1 plot ratio. The site is beside the maiden plot.

Commenting on the Berlayar Drive site, Nicholas Mak, chief research officer of Mogul.sg, said: “The lower height of the project could limit the price that the property can command. Residential units on lower floors typically command lower prices than those on higher floors.”

In a similar vein, Wong Shanting, head of research for Singapore at Newmark, said: “The low rise nature of the project on this site means it will not enjoy the stature or panoramic waterfront views typically associated with taller developments.”

PropNex head of research and content Wong Siew Ying said the low plot and height limit means the land yields relatively less saleable area.

Moreover, construction costs may be higher due to replication of lift cores, staircases, roofs and common areas across multiple blocks in the development as opposed to having one or two tall towers in the project, she added.

Newmark’s Wong highlighted that the lack of schools in the immediate vicinity of the Berlayar Drive plot may dampen the site’s appeal for younger families.

Berlayar estate – which will have about 7,000 new public housing and 3,000 private housing units – is part of the Greater Southern Waterfront stretching from Pasir Panjang to Marina East.

Knight Frank Singapore research head Leonard Tay said: “The area will likely be characterised by a lot of construction sites in the coming years as the Greater Southern Waterfront takes shape.”

But the site has many positives. “It is within walking distance from Telok Blangah MRT station on the Circle Line and yet away from the highway and road noise,” said Tricia Song, CBRE head of research for Singapore and South-east Asia.

Tay said: “Waterfront plots for residential development are rare in Singapore, and this site enjoys proximity to Berlayar Creek, Labrador Nature Reserve and the southern coastline.”

There have been no new private condo launches near the Berlayar Drive plot in the past few years.