THE tenders for 2 state-owned plots that closed on Thursday have been a combined bag, with developers eager to open their cheque books for a web site in Pine Grove whereas a mega-site in Dunman Road acquired a little bit of a chilly shoulder.
The outcomes mirror the temper amongst developers, that are eager to bid for websites in areas with pent-up demand however solely up to a degree, given the excessive value tags some mega-plots command.
That appears to have been the difficulty with the Dunman Road web site – the most important Government Land Sales plot offered because the Silat Avenue web site (now Avenue South Residence) in May 2018.
It drew simply two bids as a result of sizeable value quantum, and dangers from the newest cooling measures, rising development prices and economic uncertainty, analysts say.
A unit of the SingHaiyi Group submitted the highest bid of US$1.28bil (RM5.6bil), or US$1,350 (RM5,921) per sq ft per plot ratio (psf ppr). The developer declined to remark on its plans for the positioning.
It was a distinct story for the Pine Grove (Parcel A) plot, which attracted 5 bids in what analysts described as one of many tightest races in latest reminiscence.
A three way partnership between UOL Group and Singapore Land Group got here out tops with a bid of US$671.5mil (RM2.95bil) or US$1,318 (RM5,780) psf ppr – simply US$800 (RM3,508) forward of a bid from a unit of Allgreen Properties.
Despite the tight race, the variety of bids was nonetheless decrease than the typical of seven obtained for tenders that closed earlier this yr, famous Catherine He, Colliers’ head of analysis in Singapore.
Both leasehold websites are within the city-fringe space and are anticipated to yield a complete of 1,555 properties.
UOL Group chief funding and asset officer Jesline Goh mentioned the Pine Grove plot close to Mount Sinai Rise might be developed right into a 520-unit property.
Keen curiosity from house consumers and buyers is predicted, given its proximity to One-North, Holland Village, The Clementi Mall and The Star Vista, in addition to the upcoming Clementi Nature path, Goh mentioned.
Lam Chern Woon, head of analysis and consultancy at Edmund Tie, mentioned that regardless of the positioning’s optimistic attributes, developers are “more cautious, given the sombre economic outlook, rising prices and interest rates, and concerns about competition should the neighbouring Parcel B plot in Pine Grove be triggered and awarded”.
Still, there’s more likely to be pent-up demand, given the absence of latest giant tasks within the Ulu Pandan and Pine Grove space prior to now decade, and the potential of a Cross Island MRT station close to Sunset Way, mentioned Lee Sze Teck, Huttons Asia’s senior director of analysis.
Lacklustre participation
Ong Teck Hui, senior director of analysis and consultancy at JLL, mentioned the lacklustre tender participation for bigger websites like Dunman Road confirmed developers are largely cautious regardless of low unsold stock and strong gross sales at new launches Piccadilly Grand and Liv@MB.
“The top bid for the Dunman Road site was 20.3% higher than the next bid at US$1.07bil (RM4.69bil), or US$1,122 (RM4,921) psf ppr, which shows a restrained attempt to compete,” he mentioned.
Tricia Song, CBRE’s head of analysis for South-East Asia, famous that the positioning carries heightened growth threat – a 35% further purchaser’s stamp obligation if the developer fails to promote all items inside 5 years.
“There’s also competition from ongoing launches, and upcoming launches of a neighbouring GLS site at Jalan Tembusu, which could be built up to 640 units and an en-bloc site at Thiam Siew Avenue where 800 units are planned,” she added.
But the US$1.238bil (RM5.43bil) bid, or US$1,350 (RM5,921) psf ppr, for the Dunman Road land topped the earlier report of US$768mil (RM3.37bil) or US$1,302 (RM5,710) psf ppr for the Jalan Tembusu web site, awarded in January this yr, famous PropNex Realty head of analysis and content material Wong Siew Ying.
Steven Tan, chief government of OrangeTee & Tie, mentioned the sturdy efficiency of mega tasks resembling Normanton Park might have boosted bidders’ confidence that there’s nonetheless demand for big tasks.
“The most recent launch in the vicinity was Liv@MB, which transacted at an average price of US$2,407 (RM10,557) psf, indicating healthy demand,” he added. — The Straits Times/ANN