CDL places top bids for Handy Road, West Coast Vale plots at URA tender

CITY Developments Ltd (CDL) has emerged as the top bidder for two out of the three 99-year leasehold private housing sites at a state tender that closed on Tuesday.

The property group, helmed by Kwek Leng Beng, placed the top bids of S$212.2 million, working out to S$1,722 per square foot per plot ratio (psf ppr) for a plot in Handy Road near Dhoby Ghaut MRT Station and S$472.4 million or S$800 psf ppr for a land parcel in West Coast Vale.

The third site on offer at Tuesday's tender, along Chong Kuo Road in the Sembawang/Mandai area, saw a partnership between Lian Soon Holdings and OKP Land, placing the top bid of S$43.95 million or S$681 psf ppr.

CDL's group chief executive, Sherman Kwek, said: "We have been very selective and see great potential in the two sites . . . As Singapore's residential market begins to gradually recover, we will continue to seek suitable opportunities to increase our local land bank."

If awarded the two sites, CDL said it would explore developing three residential towers - eight to 10 storeys high - with about 200 apartments and a basement car park for the Handy Road site. It will convert a conservation building on the site into a clubhouse.

The group's proposed scheme for the West Coast Vale site envisages two 36-storey towers; the Urban Redevelopment Authority has stipulated a maximum of 730 residential units for this plot.

The tender for the Handy Road site drew 10 bids, while the Chong Kuo Road site received eight bids and the West Coast Vale plot, six bids.

The Handy Road plot, in District 9 and the most attractive of the three land parcels due to its location off Orchard Road, saw CDL casting a bid that was 12.3 per cent higher than the next highest offer from Sing Essential, believed to be linked to Hong Kong parties. CDL's bid price was also just 0.6 per cent shy of the benchmark price of S$1,733 psf ppr that was set for the Jiak Kim Road site which was awarded to Frasers Centrepoint in December last year, noted Colliers International head of Singapore research, Tricia Song.

She estimates CDL's breakeven cost for the future project on the Handy Road site at S$2,300 psf and reckons the group could be looking at an average selling price of S$2,650 psf. "Nearby, the 493-unit, 99-year leasehold Sophia Hills was 95 per cent sold as of December 2017 and median prices have increased to S$2,127psf in December from an average of S$1,900-2,000 psf earlier," she added.

For the West Coast Vale plot, CDL's top bid was 35 per cent higher than the S$592 psf ppr paid for the site of the yet-to-be-launched Twin View project, Ms Song noted.

The adjacent 752-unit Parc Riviera was 97 per cent sold as of December 2017 at an average price of S$1,200 psf, within 13 months of launch in November 2016. This could have increased the confidence of developers in the location, despite the abundant supply," said Ms Song.

She estimates CDL's breakeven for the West Coast Vale plot at S$1,250 psf and an average selling price of S$1,400-1,500 psf. The group's bid was just 0.7 per cent more than the next highest bid, by China Construction (South Pacific) Development Co. CDL is no stranger to the West Coast area, having developed Monterey Park Condominium and Hundred Trees.

The top bid for the Chong Kuo Road site was just 0.1 per cent than the second highest bid.

The simultaneous tender closings for three sites, or batched tender exercise, appears to have had little impact in tempering bid prices, said property consultants.

JLL national director Ong Teck Hui said: "Bidding for all three sites was bullish with top bids exceeding or at the top end of expectations. This is despite the batch tender closing which did not seem to temper bidding in any way as well as the availability of collective sale sites on the market."