A plum River Valley site is set to sell for what is believed to be a record price for a Government Land Sales (GLS) residential plot outside of Sentosa Cove.
The Martin Place site in District 9 drew 13 bidders, 10 of them local developers - a clear vote of confidence for the Singapore market.
GuocoLand, which is controlled by Malaysian Quek Leng Chan, submitted the top bid of $595.1 million or $1,239 per sq ft per plot ratio (psf ppr). This was just above the next bid of $588 million or $1,224 psf ppr by companies also under the Kwek family - City Developments unit Verwood Holdings, Hong Leong Holdings unit Intrepid Investments, TID Residential, and Hong Realty unit Garden Estates.
The offer price of $1,239 psf ppr would be a record for a pure GLS residential site and exceeds the $1,163 psf ppr cost for the Highline Residences site in April 2013 and the $1,157 psf ppr for the Sophia Hills plot in September that year. The Sophia Hills site was the last time a District 9 site was put up for sale.
In terms of absolute quantum, the $595.1 million bid is still lower than the $624.2 million a Siglap Road condo site went for in January. But the Siglap site is larger and can support 800 to 900 units. The Martin Place site has a cap of 450 homes, which works out to average unit sizes of about 100 sq m or 1,076 sq ft.
"Many developers interested in this site were aware of the potential fierce competition... In order to have a fair chance... the bid had to be bullish," said SLP International executive director Nicholas Mak.
GuocoLand is likely looking to set benchmark prices for 99-year leasehold homes in the area, said Savills Singapore research head Alan Cheong. These could be about $2,300 psf, exceeding even prices of freehold homes in the area.
"The site is large and we will be creating a beautiful development," said GuocoLand Singapore managing director Cheng Hsing Yao.
It is close to Orchard Road and the Singapore River, and just a short walk to the future Great World MRT station, he added.
The upbeat sentiment displayed by developers at the tender could be due to the recent increase in sales, noted JLL national research director Ong Teck Hui.
"For example, within the River Valley planning area where the site is, monthly transaction volumes of non-landed units averaged only 15 units last year but rose to 86 units in May," he said.
The bidders were also probably encouraged by recent strong sales at Cairnhill Nine, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia. They were expecting to launch when the market recovers, possibly due to a tweak in cooling measures.
Response to the tender "is a good sign for the prime residential market... The strong representation from Singapore developers shows that market confidence may be coming back", Mr Sim added.