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Multiple tender closings, but bids still bullish

Top bids for three private housing sites with tenders closing on the same day pull in bids exceeding or at higher end of expectations: property consultants


THE Urban Redevelopment Authority's batched tender exercise, or simultaneous tender closings, for three 99-year private housing sites does not seem to have tempered bullish bids by developers, say some property consultants.

In the exercise which closed on Tuesday, property giant City Developments Ltd (CDL) emerged as the top bidder for two of the three sites.

For a plot in Handy Road near Dhoby Ghaut MRT station, it bid S$212.2 million, which works out to S$1,722 per square foot per plot ratio (psf ppr); for a land parcel in West Coast Vale, it bid S$472.4 million or S$800 psf ppr.

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

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

For the Handy Road plot - in District 9 and the most attractive of the three land parcels because of its location off Orchard Road - CDL's bid was 12.3 per cent higher than the next highest offer from Sing Essential, believed to be linked to Hong Kong parties. Its directors include Kino Law and Raymond Law Ka Kui, the founders of K&K Property.

CDL's bid price was just shy of the benchmark price of S$1,733 psf ppr set for the Jiak Kim Street site, which was awarded to Frasers Centrepoint last December, noted Colliers International head of Singapore research, Tricia Song.

She estimates CDL's break-even cost for the future project on the Handy Road site at S$2,300 psf, and reckons that 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 there increased to S$2,127 psf in December from an average of S$1,900-S$2,000 psf earlier," she added.

Also bidding for the site were Cheung Kong-linked Japura Development, Wing Tai, Sustained Land, unlisted units of Hong Leong Group, Kheong Leong Company and Hoi Hup Realty (in partnership with Sunway Developments).


For the West Coast Vale plot, CDL's top bid was 35 per cent higher than the S$592 psf ppr paid in February last year 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, she said.

She estimates CDL's break-even for the West Coast Vale plot at S$1,250 psf and its average selling price to be between S$1,400 and S$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; also bidding for the site were UOL Group (in partnership with United Industrial Corporation), Qingjian Realty, EL Development and unlisted units of the Hong Leong Group.

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 higher than the second highest bid, believed to be from TG Development. Wee Hur Development, Fantasia (West) (a unit of Fantasia Holdings group) and Kheng Leong were among the other bidders who vied for the plot.

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. The top bidders seemed to have priced in an increase of 10 to 20 per cent in unit prices from current levels."

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 will explore developing three residential towers for the Handy Road site. These will be eight to 10 storeys high and house about 200 apartments and a basement car park. A conservation building on the site will be converted into a clubhouse.

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

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