Weak interest in Tan Quee Lan Street and Bernam Street GLS sites
Only 2 bids were received for Tan Quee Lan Street site; 4 bids for Bernam Street site.
As tenders closed for 3 government land sale (GLS) sites on 05 September 2019, lackluster responses were seen for 2 of these sites.
Both the Tan Quee Lan Street and Bernam Street sites have drawn only 2 bids and 4 bids respectively. On the other hand, the one-north Gateway GLS site has drawn strong interest with 9 bids submitted.
Starting off with the Tan Quee Lan Street GLS site. Amongst the 2 bids received, it drew a top bid of $800.19 million (or $1,535 psf ppr). It was submitted from a tripartite which comprises of GuocoLand, Hong Leong Group, together with Hong Leong Investment Holdings.
Given the land cost, the breakeven price will work out to be around $2,200 psf. Thus, the eventual selling price for the new launch at Tan Quee Lan Street will be approximately $2,530 psf. It is based on a 15% profit margin.
The other bid involved in the Tan Quee Lan Street site tender was a joint venture between City Developments Ltd (CDL) and MCL Land. They submitted a bid price of $768 million (or $1,473 psf ppr)
Earlier on, analysts had expected the Tan Quee Lan Street GLS site to be hotly contested. However, it wasn’t the case as some property developers may be dampened by the prospect of an aggressive bidding war.
On top of that, they may also be cautious of the ongoing competition in the area.
Some of these competing projects include Midtown Bay by GuocoLand (which is just across the site at Tan Quee Lan Street), and also the future new launch at Middle Road site (acquired by Wing Tai Holdings recently for $492 million).
Another subject site at Bernam Street for sale drew just 4 bids in total. The top bid of $440.9 million (or $1,463 psf ppr) came from Hao Yuan Group’s real estate arm, HY Realty.
The other property developers that were involved in the tender include MCL Land; Far East Commercial Trustee & Boo Han Holdings.
According to JLL, the top bid received for the Bernam Street GLS site was lower than market expectations, despite it being located close to Tanjong Pagar MRT station and the upcoming Prince Edward Road MRT station.
In addition, the site is situated within the zone which is eligible for the CBD Incentive Scheme.
Colliers International forecasted that the estimated breakeven amount for the Bernam Street GLS site will work out to be in the range of $2,150 to $2,200 psf. It strongly suggested that HY Realty could develop small unit types for its new project.
It was a completely different story for the third site located at one-north Gateway as it drew a total of 9 bids.
The top bid of $155.7 million (or $1,001) came from TID Residential. It is a joint venture between Hong Leong Holdings together with Japanese real estate developer, Mitsui Fudosan Co. Ltd.
The breakeven price should work out to be in the range of $1,620 to $1,680 psf.
Market watchers said that the keen interest in the one-north Gateway GLS site was pretty much expected due to its palatable size and is well-located near the one-north Business Park.
They’ve also added that there aren’t any upcoming new private homes being launched in the area. Thus, it would be mean that there won’t be much competition in the area for the future new launch at one-north Gateway.