CDL makes highest bids for Handy Road, West Coast Vale sites
SINGAPORE — The tenders for three residential sites at Chong Kuo Road, Handy Road and West Coast Vale closed on Tuesday (Jan 30), with City Developments (CDL) making the highest bids for the latter two sites.
SINGAPORE — The tenders for three residential sites at Chong Kuo Road, Handy Road and West Coast Vale closed on Tuesday (Jan 30), with City Developments (CDL) making the highest bids for the latter two sites.
Among the sites which are all on 99-year lease, the 51,626 sq ft land parcel at Handy Road attracted the most number of bids, while the 210,883 sq ft West Coast Vale site drew the highest bid.
CDL Group Chief Executive Officer Sherman Kwek said in a press release these two sites have “excellent locational attributes and proximity to various amenities”. He added that the developer has been “very selective and see great potential” in them.
“As Singapore’s residential market begins to gradually recover, we will continue to seek suitable opportunities to increase our local land bank,” Mr Kwek said.
The Handy Road site drew 10 bids, with CDL making the top bid of S$212.2 million, or S$1,722 per sq ft per plot ratio (psfppr). The second highest bid of S$188.9 million was lodged by Sing Essential.
CDL said that if it is awarded the site, it will explore building three eight- to 10-storey residential towers with about 200 apartment units and a basement carpark. It could also convert the conserved building at the site into a clubhouse.
Colliers International head of research for Singapore Tricia Song said it was unsurprising that the Handy Road site attracted the strongest interest. “The winning margin… was a wide 12.3 per cent, reflecting top bidder CDL’s determination and confidence in the site,” she said. She added that the top bid, in terms of its price psfppr, was just shy of the benchmark S$1,733 psfppr set by the Jiak Kim Road site which was awarded to Frasers Centrepoint Limited in December last year.
ZACD Group executive director Nicholas Mak noted that the “attractive” site was less than 100m from Dhoby Ghaut MRT Station. Its “small and manageable size” also makes it less demanding on the resources of developers to redevelop, said Mr Mak, adding that there has not been any government land sale site made available in the vicinity for the last four years.
Still, Mr Mak described CDL’s bid as “quite bullish” given that it was 48.9 per cent higher than the price of the nearby Sophia Hills land parcel sold in March 2013 at S$1,157 psfppr. The estimated breakeven price for the new residential units on the Handy Road site is between S$2,340 psf and S$2,400 psf, said Mr Mak.
CDL also made a bid of S$472.4 million for the West Coast Vale land parcel, which translates to S$800 psfppr. Out of a total of six bids, the next highest offer of S$469 million came from CSC Land Group (Singapore).
CDL said it is planning to build two 36-storey residential towers there, with about 730 apartment units and a basement carpark.
Mr Desmond Sim, who heads CBRE Research (Singapore and South East Asia), noted that for a “seasoned developer” to put in the highest bids for two out of the three sites offered for sale via a batch tender was “a reflection of the developer’s confidence in the two sites, helped by strong financial muscle”. “The tenders were batched to spread the bids across more than one site with the intention of curbing exuberance in land bids,” he said.
For the 46,101 sq ft Chong Kuo Road site, which is off Sembawang Road, Ms Song noted that the top three bidders all tabled bids of over S$43 million. The highest offer of S$43.9 million came from a joint bid by Lian Soon Holdings and OKP Land.
“At the top bid of S$680.80 psfppr, we estimate breakeven cost at S$1,100 psf, and an average selling price of S$1,300 psf to S$1,350 psf,” she said.