Surprise number of bids for Upper Thomson housing site

SINGAPORE — Despite the sluggish property market, a private residential site near Upper Thomson Road has attracted the most bids since the introduction of the Total Debt Servicing Ratio (TDSR) in June last year, receiving a top offer that exceeded expectations.

The 113,051 sqf parcel at Lorong Puntong received 18 bids at the close of the tender yesterday, with the top offer of S$173.6 million, or S$731 per square foot per plot ratio (psfppr), placed by China-based Nanshan Group Singapore, the Urban Redevelopment Authority (URA) said yesterday.

Nanshan’s offer was 7 per cent above the second-highest bid of S$161.9 million, or S$682 psfppr, by SL Capital Ventures and 61 per cent above the lowest bid of S$108 million, or S$455 psfppr, by Tee Vista.

Property analysts said the strong interest in the site, under the Confirmed List of the Government Land Sales programme for the second half of this year, showed that developers are still hungry for land — albeit more selectively so. The parcel’s relatively small size also added to its attractiveness as smaller developers would find the price tag palatable.

“This plot is relatively small and thus commands a smaller quantum of below S$200 million … The bidders were probably also encouraged by the good attributes of the site — it is located in a mature estate and supported by a comprehensive network of amenities and renowned schools,” said Mr Desmond Sim, head of CBRE Research.

“Previous projects in the vicinity have sold well, further boosting developers’ confidence in the plot,” he added.

The 99-year leasehold site, with a maximum gross floor area of 237,409 sqf, is situated between two MRT stations currently under construction: Bright Hill and Upper Thomson. It is also near Ai Tong School — which is also currently under construction — Bishan Park Secondary School and Peirce Secondary School.

The site can potentially yield 280 units.

SLP International Property Consultants executive director Nicholas Mak said Nanshan Group appeared very confident of the site, noting that its bid surpassed the S$720 psfppr that UOL and Singapore Land had paid in 2012 for a nearby plot. “Based on the land price, the estimated break-even price for a new condominium to be developed on this (Lorong Puntong) site could vary from S$1,240 psf to S$1,310 psf. The Nanshan Group could be very confident of this site due to its attractiveness … Furthermore, it may plan to build an iconic development as its maiden condominium project in Singapore,” he said.

Nanshan Group hails from Shandong, China, and has been actively participating in Government Land Sales tenders this year.

Century 21 chief executive Ku Swee Yong said Nanshan’s offer could have been part of a strategy to “overbid” in order to secure a win and gain a foothold in Singapore. “That could explain the gap between the top bid and the rest,” he said.

Mr Ku added that the selling price for a 750 sqf unit might be between S$1,200 and S$1,400 psf.