Geylang site attracts top bid of S$145.9m amid strong interest

SINGAPORE — The cautious buying sentiment in the private housing market has turned developers’ attention to sites that are well-located, such as the plot of land in Geylang East Avenue 1 that was hotly contested in a tender which closed yesterday.

The tender for the 99-year leasehold 67,146 sq ft site attracted 16 bids, with SL Serangoon placing the top bid of S$145.89 million. With a maximum permissible gross floor area of 188,103 sq ft, that translates into almost S$776 per square foot per plot ratio, the Urban Redevelopment Authority said yesterday.

Analysts said this is one site that “ticked most of the right boxes” in today’s market conditions, as it is close to the Aljunied MRT Station and several good schools and not far from the city centre.

“The general sentiment now is rather cautious, but sites with attractive attributes can still garner a lot of interest from developers. Besides the surrounding amenities and eateries, this site is also near Katong and Parkway Parade. That’s quite a plus as well,” said Ms Chia Siew Chuin, Colliers International’s Director of Research and Advisory.

Recent new condominium sales data showed that well-located projects that are priced competitively continued to enjoy robust interest, which is why developments such as Duo Residences in Bugis and Alex Residences in Alexandra have done very well.

“The market is expected to slow down and that’s why developers are more selective about sites that they want to acquire. They will go for something they are confident of selling well in the current market,” said Mr Nicholas Mak, Executive Director of Research and Consultancy of SLP International Property Consultants.

“In addition, the site is relatively small, which lowers the risk of project overhang. A smaller development would also have a higher chance that all the units would be sold quickly,” he said.

The Geylang East Avenue 1 site, which can yield an estimated 215 units, was triggered for sale from the Reserve List of the Government Land Sales (GLS) programme for the second half of last year.

OrangeTee’s Head of Research and Consultancy Christine Li said smaller developers were drawn to the site as they found the size more manageable with their limited resources.

“The Geylang East Avenue 1 site was hotly contested due to its relative small size which is easily accessible to small developers. Small developers shut out of the previous GLS land tenders due to the large tender quantum were finally able to participate in this tender exercise. Previously, they had to team up in order to bid for larger sites,” she said.

The previous tender featuring a small site was a Jalan Jurong Kechil land parcel that was put up for sale more than a year ago. The November 2012 exercise attracted 23 bids.

The analysts expect the top bid for the Geylang East Avenue 1 to translate into a breakeven price of S$1,200 to S$1,300, with selling prices to start at S$1,400 psf.