QINGJIAN Realty and Forsea Residence topped bids in a government land sale tender for a residential plot in one-north with a S$395 million bid, beating two other groups. 

The joint venture’s bid of S$1,191 per square foot per plot ratio, while within expectations, is 4.4 per cent lower than the S$1,246 psf ppr that EL Development paid for a nearby site at Slim Barracks on which it is building Blossoms By The Park. 

It is also 1.6 per cent lower than the S$1,210 psf ppr that Gao Xiuhua, one of the owners of Kingsford Development, paid for the plot housing the upcoming The Hill @ One North. Both condominium sites are located in Slim Barracks and were sold in 2021. 

Bids for the Media Circle site turned out unexpectedly higher than the sole bid for the other GLS site tendered on Thursday (Jan 18). The prime Marina Gardens Crescent white site saw one offer from a GuocoLand and Hong Leong Group consortium at nearly S$770.5 million or S$984 psf ppr. 

“Today’s tender results show that developers are cautious towards large sites and inclined towards smaller plots to mitigate risks in an uncertain market marked by escalating costs and shrinking profit margins,” said Chia Siew Chuin, JLL’s head of residential research.  

“Smaller sites require a more manageable capital outlay, enabling developers to stay agile, minimise costs and mitigate risks.”

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Tricia Song, CBRE head of research for Singapore and South-east Asia, read it as  continuous risk aversion among developers in light of the high interest rate environment, macroeconomic headwinds and the cooling measures.

The Media Circle site, in the Rest of Central Region, can yield an estimated 355 residential units, with commercial units on the first floor. Located near the one-north office clusters, the 99-year leasehold site is 10,632.1 sq m in size, with a maximum permissible gross floor area (GFA) of 30,834 sq m.

Qingjian and Forsea Residence’s bid fell within the S$1,050 to S$1,250 psf ppr most analysts polled by The Business Times expected. But market watchers had expected to see more interest – up to six bids.

In 2021, both the Slim Barracks sites drew 10 bids each. 

The Qingjian joint venture’s offer for the Media Circle site, at S$1,191 psf ppr, was closely followed by a S$385 million (S$1,160 psf ppr) bid from a joint venture between Intrepid Investments (Hong Leong Holdings), Garden Estates (Hong Realty), and TID Residential (Hong Leong Holdings and Mitsui Fudosan). 

The last of three bids placed came from CEL Development and Singhaiyi Property Development, which jointly placed a bid of S$321 million, or S$967 psf ppr.

JLL’s Chia reckoned the breakeven cost of the latest project could be about S$2,000 psf. Launch pricing could be pitched at between S$2,300 and S$2,400 psf on average, analysts expect, slightly lower than Blossoms By The Park due to its distance from the MRT. 

The top bid for the Media Circle site reflects developers’ confidence in demand for homes in one-north, said Lee Sze Teck, Huttons’ senior director of data analytics. 

Despite being launched right after the latest hike in Additional Buyer’s Stamp Duty (ABSD) rates last April, Blossoms By The Park sold 74.5 per cent or 205 units of its 275 units at a median price of S$2,427 psf.

It has so far sold more than 85 per cent of all units, said Huttons’ Lee. 

 PropNex head of research and content Wong Siew Ying said: “Proximity to Science Park and one-north could make the future development appealing to those who work in these employment hubs or investors looking to rent units out.”