April 26, 2018
Ms. Tricia Song, Head of Research for Singapore at Colliers International:
"The relatively bullish land bids for the three sites were not unexpected given the upturn in the residential market in Singapore, recovery in prices and rise in market sentiment. Developers went in with guns blazing, particularly for the Cuscaden Road site, setting a bench mark price for a 99-year leasehold site. The highest land price ever paid was for the site next door – YTL bought the former Westwood Apartments collective sale for SGD2,525 psf ppr during the peak in 2007. It has been developed into 3 Orchard-by-the-Park. Park House, next to the sites, has been launched recently for collective sales, asking for SGD2,387 psf ppr.
What stood out was perhaps the tender for the Silat Avenue site which only attract a sole bid from UOL Venture Investments, UIC Homes, and Kheng Leong Company. Silat Avenue is an appealing site within two kilometers from the Central Business District, and we think the underwhelming tender outcome could be due to the large size of the site (which could accommodate 1,125 homes) and relatively untested location, away from MRT stations. Based on this bid of SGD1,138 psf ppr, we estimate a breakeven price of SGD1,600 psf and an end-selling price of SGD1,800-1,900 psf.
Nearby new 99-year leasehold Highline Residences near Tiong Bahru MRT transacted at an average of SGD1,850psf since 2014.
The Cuscaden Road site is rare and the most upscale of the Government Land Sale sites on offer in recent years.
Nonetheless, the top bid of SGD2,377psf ppr smashes all records for a residential Government land sale, as well as earlier market expectations of SGD1,800-2,300 psf ppr. This also exceeds the previous GLS record for Jiak Kim Street site’s SGD1,733 psf ppr by 37%. Based on this land price, we estimate breakeven price of SGD3,100 psf, and a selling price of SGD3,500-3,700 psf. While bullish, it is probably achievable, as nearby freehold luxury new launches such New Futura, Ardmore Le Nouvel have achieved average prices of SGD3,200-4,000 psf, while 99-year leasehold Wallich Residence in Tanjong Pagar has sold some units at SGD3,700 psf.
Due to its palatable size (250 homes) and proximity to Mattar MRT station, the Mattar Road site attracted the most number of bids – 10, including large and smaller developers. The top bid of SGD1,109 psf ppr is relatively in line with market expectations. Based on this price, we estimate a breakeven price of SGD1,600 psf ppr and a selling price of SGD1,750-1,800 psf."