The first private residential site tender to close since a new debt servicing framework for property loans was introduced has drawn strong demand, surprising analysts who expected greater caution.
Ten bidders contested for the 99-year leasehold site (parcel B) at Tampines Avenue 10, the Urban Redevelopment Authority (URA) said yesterday.
The highest offer came from MCC Land (Singapore), at $562.01 per square foot per plot ratio (psf ppr), or $289.7 million in absolute terms.
This was 7.6 per cent higher than the next highest bid of $522.24 psf ppr, or $269.2 million, from a partnership of UOL Venture Investments and Kheng Leong Company.
Analysts zoned in on the size of the top bid, which was 34 per cent higher than the adjacent site where Q Bay Residences will be. That plot sold for about $418 psf ppr last May. Also, only three bids were put in.
It led consultants to predict earlier only three to six bidders and a top bid in the range of $400 psf ppr to $470 psf ppr. They also noted that the plot was not near an MRT station, and there are several other projects in the area.
Eugene Lim, key executive officer at ERA Realty, said the results yesterday showed that developers are "still hungry for land sites to build their land bank", even after the Monetary Authority of Singapore put in place the total debt servicing ratio (TDSR) framework for all property loans starting on June 29.
URA had extended the deadline for the tender for the Tampines Avenue 10 plot from July 2, to give developers more time to consider the new rules.
But it appeared to have little impact.
When contacted, an MCC Land spokesman said: "We are still confident about the mass market housing segment and intend to develop a condominium project with about 500 units on the site".
Analysts are expecting a breakeven price of $940 psf ppr to $1,050 psf ppr, with a selling price above $1,100 per square foot (psf). Average selling prices at Q Bay is around $1,022 psf, Religare Capital Markets data shows.
Higher land prices are trapping developers too.
Source: Business Times –17 July 2013