Despite
sluggish sales of new private homes, a residential site in Toa Payoh drew a
massive 14 bids at the close of the auction on Thursday (Jun 18), indicating
strong demand from developers for sites in mature housing estates.
The Housing and
Development Board (HDB) said the 12,154.6 square metre, 99-year leasehold site
at the junction of Lorong 6 and Lorong 4 Toa Payoh attracted a top bid of $345.86
million from a group that includes Evia Real Estate and Malaysia
This works out
to around $8,130 per square metre of gross floor area, or about $755psf.
The site is
expected to yield an estimated 535 private residential units. Alternatively, developers
may, with prior written approval, build a mix of flats and strata landed
houses.
HDB, as the
Government’s land sales agent, launched the site for public tender on Apr 29. A
decision on the award of the tender will be made at a later date after the bids
have been evaluated, HDB said.
Desmond Sim,
Head, CBRE Research, Singapore
and South East Asia , said the strong demand
was "unsurprising" given the site's location within a
well-established mature estate with very few private residential projects. The
site is also within walking distance of the Braddell MRT Station.
The top bid was
only 1.1% higher than the second-highest bid of $342.1 million, or around $747psf
ppr — the closest gap seen since the second quarter of last year, when a site
in Choa Chu Kang Drive was awarded to Sim Lian Land at a margin of 2.2% over
the next bidder, noted Dr Chua Yang Liang, head of research and consultancy at
JLL Singapore.
“The tightness
of these recent bids could reflect a more consistent view among the developers
regarding market conditions going forward, coupled with the fact that the area
is more mature and there is possibly more transactional data to help developers
assess market demand more consistently,” said Dr Chua.
Ms Christine
Li, director of research at property firm Cushman & Wakefield, said the top
bid also showed that land prices in the area had held up despite tepid sales in
the primary market. She noted that the bidding was in line with the $731psf ppr
for a parcel in Lorong Puntong in the Upper Thomson area.
Ms Li expects
the break-even price of the Toa Payoh project to be at around $1,250 psf and
the selling price to start at $1,450psf to $1,500psf. “Given that there have
not been new private-home launches since 2009, this project should be well
received by upgraders and first-time buyers if it is priced realistically,” she
said.
Evia has
launched three executive condominium developments since its founding in 2010.
It has sold 98% of the 546 units for its latest project, Lake Life
Following the
release of the provisional tender results for the Toa Payoh site, Evia’s
managing partner Vincent Ong said: “Similar to Jurong, we believe there is a
pent-up demand for private housing in this area, as it is one of the most
populated public housing estates in Singapore
Source: CNA
It looked like contrary to one of our reader's concern, developers aren't really bothered about the "temple effect"...
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