SINGAPORE: A private residential site at Dundee Road next to  Queenstown MRT station received nine bids from developers at the close of tender yesterday (23 Jun).

The 99 year leasehold site has a site area of 113,194 sq ft and could house around 645 residential units.

The top bid $483.2 million or $871 per sq ft per plot ratio (psf ppr) was submitted by HY Realty, followed by Allgreen Properties at $445.9 million or $804 psf ppr.

“The top bid reflects the hunger (for) and confidence in this site at Dundee Road, going by its value,” noted Mr Desmond Sim, Head of CBRE Research for Singapore & Southeast Asia.

“The bid demonstrates the confidence in the mature estate of Queenstown, with its network of amenities and the MRT being located right next to the site, as well as the stability of the Singapore market.”

The tender will be awarded at a later date after evaluation.

The highest bid of $871 psf ppr demonstrates that new launch prices show no sign of abating, despite many analysts calling for a drop in prices.

One likely reason is the expected reduction of residential sites made available to developers in the coming months, prompting developers to bid more aggressively.

This table, showing the land costs and average selling prices for the projects around Queenstown and Redhill the past three years, tells the whole story.

Condos in Queenstown/Redhill Over Past 3 Years

Land Sale Date Project Tenure Distance to MRT Land Cost ($PSF PPR) Estimated Average Price ($PSF)
23 Jun 2015 Dundee Road (to be named) 99 years 128m to Queenstown 871
21 Apr 2014 The Crest 99 years 508m to Redhill 821 1,679
7 Feb 2013 Commonwealth Towers 99 years 171m to Queenstown 883 1,745
12 Dec 2012 Alex Residences 99 years 260m to Redhill 970 1,715

 

The closest comparison can be made between Commonwealth Towers and the Dundee Road site. The land cost has only dropped by $12 psf ppr over the last two years, while construction, manpower and marketing costs have all gone up in the same period.

If this land bid is anything to go by, we could well expect land sales in the near future to be just as competitive and aggressive, given developers’ expectations of a lack of private residential land supply.

And as a consequence, it will be hard to expect future new launch prices to come down much, if any.

Source: PropertyGuru, HDB, Squarefoot