City Developments (CDL) was the top bidder for two of the three private housing sites at a state tender that closed yesterday.
It lodged the top bid of $212.2 million, or $1,722 per sq ft per plot ratio (psf ppr), for a plot in Handy Road near Dhoby Ghaut MRT station.
The developer also bid $472.4 million, or $800 psf ppr, for a land parcel in West Coast Vale.
The third site on offer - in Chong Kuo Road in the Sembawang/Mandai area - received a top bid of $43.95 million, or $681 psf ppr, from a partnership between Lian Soon Holdings and OKP Land.
CDL group chief executive Sherman Kwek said: "We... see great potential in the two sites... As Singapore's residential market begins to gradually recover, we will continue to seek suitable opportunities to increase our local land bank."
The firm said it will explore developing three residential towers - eight to 10 storeys high - with about 200 apartments and a basement carpark for the Handy Road site. It will convert a conservation building on the site into a clubhouse.
The West Coast Vale site could house two 36-storey towers. The Urban Redevelopment Authority has stipulated a maximum of 730 residential units for this plot.
The tender for the Handy Road site drew 10 bids, while the Chong Kuo Road site received eight, and the West Coast Vale plot got six.
CDL's bid for the Handy Road plot - the most attractive of the three sites because of its District 9 location off Orchard Road - was 12.3 per cent higher than the next offer, from Sing Essential, believed to be linked to Hong Kong parties.
The bid price was also just 0.6 per cent shy of the benchmark price of $1,733 psf ppr that was set for the Jiak Kim Street site awarded to Frasers Centrepoint last month, noted Colliers International's head of Singapore research Tricia Song.
She estimates CDL's break-even cost for a Handy Road project at $2,300 psf and reckons the group could be looking at an average selling price of $2,650 psf.
Bidding for all three sites was bullish, with top bids exceeding or at the top end of expectations.
JLL NATIONAL DIRECTOR ONG TECK HUI
"Nearby, the 493-unit, 99-year leasehold Sophia Hills was 95 per cent sold as of December last year and median prices have increased to $2,127 psf in December from an average of $1,900 psf to $2,000 psf earlier," she said.
CDL's bid for the West Coast Vale plot was 35 per cent higher than the $592 psf ppr paid for the site of the yet-to-be-launched Twin View project, Ms Song noted.
The adjacent 752-unit Parc Riviera was 97 per cent sold as of last month at an average price of $1,200 psf, within 13 months of its launch in November 2016. This could have increased the confidence of developers in the location, despite the abundant supply, said Ms Song.
She estimates CDL's break-even for the West Coast Vale plot at $1,250 psf and an average selling price of $1,400 psf to $1,500 psf. The group's bid was just 0.7 per cent more than the next highest bid, by China Construction (South Pacific) Development.
CDL is no stranger to the West Coast area, having developed Monterey Park Condominium and Hundred Trees.
The top bid for the Chong Kuo Road site was just 0.1 per cent more than the second highest.
The simultaneous tender closings for three sites appear to have had little impact in tempering bid prices, said property consultants.
JLL national director Ong Teck Hui said: "Bidding for all three sites was bullish, with top bids exceeding or at the top end of expectations.
"This is despite the batch tender closing, which did not seem to temper bidding in any way, as well as the availability of collective sale sites on the market."