With the new government land sales of Jiak Kim Street, the recent Martin Modern new launch at nearby Robertson Quay is seemed to be a great starbuy.
Frasers Centrepoint Limited trumped nine other bidders with an offer of $955.4 million for a residential plot in Jiak Kim Street, the former site of popular nightspot Zouk.
Separately, Allgreen Holdings emerged top among seven bidders for a residential parcel in Fourth Avenue, lodging a tender of $552.96 million.
The two 99-year leasehold sites were originally on the Reserve List of the Government Land Sales (GLS) programme and were triggered for public tender after minimum acceptable bids were made.
The 13,482 sq m site in Jiak Kim Street comes with commercial use on the first floor. FCL’s bid for this site translates to $1,732.55 per square foot per plot ratio (psf ppr), only 0.6 per cent above the second bid from Hong Leong Holdings and Hong Realty, which are controlled by Singapore tycoon Kwek Leng Beng. This toppled the last high of $1,239 psf ppr achieved at the site for GuocoLand’s Martin Modern in June last year by a stark 39.9 per cent. This will translate to an estimated breakeven cost of $2,300 per square foot and a potential minimum average selling price of $2,800 per square foot. Martin Modern’s current selling price is around $2,300 per square foot. This will seem to be $500 per square foot cheaper than the similar Jiak Kim Street bidded plot. This is also in line with the approximately $500 per square foot difference in both plots land cost.
The bid by fellow tycoon Robert Kuok’s Allgreen Holdings for the 18,532.2 sqm site at Fourth Avenue reflects a land rate of $1,540 psf ppr, which is 2 per cent above the second-highest bid, from Bukit Sembawang Estates. This will translate to an estimated breakeven cost of $2050 per square foot and a potential minimum average selling price of $2,550 per square foot. The nearby freehold condo along Queen’s Road, The Asana, is selling at only around $2,500-$2,600 per square foot and is estimated to TOP in Q1 2018.
Allgreen Properties picked up two collective sale sites in Bukit Timah last week, including Royalville.
The bullish bids come after warnings from the Government on over-exuberance in the property market.
“Despite the authority flagging the risk of excessive exuberance… the bidding for choice sites has not shown any sign of slowing,” said Cushman & Wakefield research director Christine Li.
Ms Tricia Song, research head for Singapore at Colliers International, said the strong showings for the Jiak Kim Street and Fourth Avenue sites “clearly reflect bidders’ confidence in a recovering… market amid the positive economic outlook”.
Frasers Centrepoint Singapore chief executive Christopher Tang said the Jiak Kim Street site is “a rare location in a cosmopolitan locale, filled with rich heritage and character, sitting right on the edge of the Singapore River”.
Market watchers felt that the aggressive price Allgreen paid for Royalville could have deterred some developers from bidding for the site in Fourth Avenue. Still, having seven bidders is considered a respectable showing, Ms Li said.
JLL head of research and consultancy Tay Huey Ying noted that the batching of tender closings for the two sites “appeared to have helped spread the competition for each site, and potentially taming the bids somewhat”.
She added: “Interestingly, local developers continue to maintain their hold on the prime district market, pipping foreign developers such as China’s CSC Land and Hong Kong tycoon Li Ka-shing’s Japura for the two sites in Jiak Kim Street and Fourth Avenue, respectively.”