A condo plot in Clementi Avenue 1 was put on the market yesterday with only moderate interest expected from developers.
A top bid of $265 million to $285 million, or $540 to $580 per sq ft per plot ratio (psf ppr), is expected.
The 1.3ha, 99-year leasehold site can yield about 460 units and is near Nan Hua High School and the NUS High School of Mathematics and Science, but it also fronts the Ayer Rajah Expressway.
"It is rare to have a site so well situated next to good schools and also close to the National University of Singapore. It should find favour with developers looking at beefing up their land bank with good suburban sites," said Mr Lee Liat Yeang, a real estate lawyer at Rodyk & Davidson.
There are also few new 99-year leasehold residential developments near the plot, which is in a popular, mature residential estate, noted Mr Nicholas Mak, SLP International executive director. Development sites under the Government Land Sales programme are also becoming more scarce.
Still, a developer would be concerned about unsold units at the 755-unit Trilinq condo, under 2km away in Jalan Lempeng, which was launched in 2013 but has moved about 200 of 350 units launched so far. Sales have remained sluggish despite the median price being cut from about $1,500 per sq ft (psf) in 2013 to about $1,350 psf this year, said Mr Ong Kah Seng, R'ST Research director.
And while there are few new homes in the immediate region, there are many completed private residences in the West Coast area that are generally freehold or on 999-year leases.
A project on the Clementi Avenue 1 plot will eventually face leasing and resale competition from these West Coast homes, said Mr Ong. Resale prices in the West Coast also appear to have been weakening, with those of Botannia, Carabelle and Hundred Trees falling by about 3 to 7 per cent over the past year, he added.
"The West Coast and Clementi locality is losing some shine... New suburban (private housing estates) that are shaping up, such as Bartley, Lakeside and Hillview, have or will have MRT stations near the private homes. The Jurong and Lakeside areas are also fast rejuvenating."
In contrast, this part of Clementi is some distance away from the Clementi MRT station.
Mr Ong expects five to nine developers to bid, with offers between $540 and $580 psf ppr - not far off a Government Land Sales site in West Coast Vale that received six bids and went for $551 psf ppr in August.
The tender closes on Dec 9, said the Urban Redevelopment Authority yesterday.