A plum 99-year leasehold private condo plot at Jervois Road drew a whopping 17 bids yesterday, attesting to the site's choice location and relatively affordable investment size for the site's development.
The top bid for the District 10 plot that could now be set for about 130 homes was $118.9 million or $880.74psf ppr from Singapore Land unit SL Development. This was 8.1% higher than the next highest offer of $814.81psf from Chng Ghim Huat Group.
There had been a wide variation of forecasts on the top bid for the District 10 site from property consultants - ranging from $630 - $950psf ppr - when the site was launched on Dec 22, two weeks after the government rolled out the additional buyer's stamp duty (ABSD).
Many analysts used as their reference point the $754psf ppr top bid by City Developments in December for a plot at Alexandra Road (next to Ascentia Sky condo project, near Redhill MRT Station and about 550 metres from the Jervois Road plot).
One school of thought places the Jervois plot as superior as it is a prime district 10 plot, next to a GCB Area and near the Malaysian High Commission. However, others reason that the Alexandra site, though in district 3, may have an advantage as it is closer to an MRT station and amenities.
Donald Han, special advisor at HSR Property Group, said: "Despite 17 bids, the top price was below my expectation of $950psf ppr. Developers are factoring in teh risks created by the five-year limit to develop and sell all units in the project if they don't want to pay the 10% ABSD. As well, interest has thinned from foreign buyers, who have to pay 10% ABSD," he added.
Michael Ng, group general manager of Singapore Land and its parent UIC, said yesterday: "Our breakeven cost would be about $1,300psf and we would aim to sell at around $1,500 - $1,600psf on average. This would be fairly reasonable for a condo in the Jervois/Bishopsgate locale near embassies.
"This site is next to a cul de sac and is set amidst lush greenery and mature trees." The project may be launched by year end.
He added that SingLand has been on the lookout for choice residential sites but such plots in prime districts are hard to come by at reasonable prices. "Most of them are collective sale sites which would generally be priced at $1,500psf ppr and upwards."
SingLand's proposed scheme on teh Jervois plot is a five-storey project of about 130 - 140 units - comprising mostly one and two-bedroom apartments along with some three bedders. "We'll also include about seven to eight strata terrace houses - probably three storeys high with a basement. We can build these landed units on the triangular end of this site, which will leave a more regular-shaped plot for the apartments," said Mr Ng.
Commenting on the strong turnout of 17 bidders at yesterday's tender, Credo Real Estate executive director Ong Teck Hui said: "The prime residential market may be struggling but there's obvious no shortage of interest when an attractive prime district site is put on the market. Enthusiasm in this tender rivals that for the Bishan Street 14 site which attracted 10 bidders and a top bid of $869psf ppr a year ago."
Adding to the site's appeal is its manageable size, as reflected in the $118.9 million top bid, making it a relatively less risky project than the typical large Government Land Sales sites, he added.
CBRE executive director Li Hiaw Ho noted that based on URA sales data for October - December 2011, a small-format unit in Nathan Residences (under construction) was sold at $1,655psf while units in One Jervois and Sheares Ville (completed in 2003) were sold between $1,450psf and $1,560psf. "These three projects have a freehold tenure. We expect that units on the new 99-year leasehold site should be able to command a premium because of their rarity, and therefore, may be able to fetch $1,600psf to $1,800psf when launched."
Source: The Business Times
The Jervois site certainly looked like a steal compared to what CapitaLand paid for its Bishan site, despite the former plot being "low-density" and all. However, the wife and I do question the merits of living too close to an "embassy area" - we will probably have to give up hosting our regular late-night mahjong sessions with our friends.
On a separate note, the latest GLS sale may probably benefit our dear friends (you know who you are) that are living at Clydesview, a freehold condo located directly across from the SingLand's site. Although Clydesview is district 3 (actually it is just off-district 10 as it is on the "wrong" side of Jervois Lane. And some agents are still listing Clydesview as district 10, deliberately or otherwise...), we have seen how the CapitaLand site in Bishan has already caused a spike in prices at nearby projects such as Bishan Loft and Clover By The Park. So S&F...HUAT ah!