The Urban Redevelopment Authority of Singapore (URA) has awarded the tenders for three sites under the first half of this year’s GLS (Government Land Sales) program. Their tenders closed on 5th September, and were awarded yesterday to the respective highest bidders. All three land parcels are on 99 years leasehold tenure.
The sites are located at Bernam Street, Tan Quee Lan Street, and one-north Gateway, and will be developed respectively into One Bernam, Midtown Modern (as an extension of Guoco Midtown, to be called Guoco Midtown II), and One-north Eden.
The 41,400 square feet One Bernam site attracted four bids. The top bid of SGD$440.9 million or $1,463 per square foot per plot ratio (PSF PPR) was put in by chinese firm HY Realty, who were duly awarded the site.
The 124,116 square foot Midtown Modern site at Tan Quee Lan was awarded to a joint venture of GuocoLand subsidiary GLL D, Hong Realty, and Intrepid Investments, based on their top bid of S$800.2 million, or SGD$1,535 PSF PPR. It was the higher of just two bids received by URA.
The muted response for both the Tan Quee Lan and One Bernam sites could have been due to developers choosing to err on the side of caution, should the supply overhang be worsened by a recession in the coming year. In addition, there could have been expectations among developers of tough competition for the Midtown Modern site, given the 10 bids submitted at the tender for the nearby Middle Road site.
The Most Hotly Contested Site
The most hotly contested of the three land parcels was the 62,201 square feet one-north Eden site. This is located at one-north Gateway, next door to One-north Residences. TID Residential, a collaboration between Mitsui Fudosan and Hong Leong Holdings, clinched the site from a field of nine bidders. Their top bid of SGD$155.7 million works out to $1,001 PSF PPR.
Mr Desmond Sim, CBRE’s head of research (South-east Asia), noted that the keen interest in this land parcel was unsurprising, given its “palatable size and strategic location near one-north”.
However he highlighted that the site sits on top of MRT tracks, which may present some challenges in construction, and added costs. This could be one reason why it took a very experienced developer like TID Residential to have the confidence to place the highest bid for it.
This one-north Eden site was launched for sale in line with JTC’s goal of adding more homes into the one-north district. It can yield about 165 units, which will help meet the housing needs of a growing workforce in the estate, many of whom are professional expatriates.
It will also enhance the attractiveness of the area as a mixed use business park. The last new residential development launch was that of one-north Residences over 13 years ago. So the development of one-north Eden is certainly a timely move, as there is a distinct shortage of rental accommodation within one-north itself.
As Nicholas Mak, head of research and consultancy for ERA Realty pointed out, “There is no upcoming supply of new residential launches in one-north, meaning there would be very little competition for this project when it is launched for sale. Hence, there would be pent-up demand for new housing units in that area.”
See related article on tenders for these three sites.
Source: The Business Times . 13 September 2019