China Construction Development has put in the top bid of $292 million in a hard-fought, nine-way battle for a residential land parcel in West Coast Vale.
The bid of $592 per sq ft per plot ratio (psf ppr) was towards the upper end of expectations, said JLL national director of research and consultancy Ong Teck Hui.
He added: "It reflects optimism that the residential market will continue to improve. Private home sales in 2016 grew nearly 16 per cent over the previous year and is expected to improve further in 2017, while price declines have been moderating.
"This has led to the perception that the market is closer to the bottom and contributed to the firm bidding for the subject site."
The West Coast Vale 99-year leasehold plot was launched on Dec 7. The tender closed yesterday.
Close behind, in second spot, MCC Land tendered $289.9 million, or about $587.3 psf ppr, for the parcel with a site area of about 176,294 sq ft - close to the top end of the expected $450 psf ppr to $600 psf ppr range.
Mr Desmond Sim, head of CBRE Research for Singapore and South-east Asia, said: "The plot is the last site to be sold on the Government Land Sales confirmed list for 2016 and the profiles of the bid parties reflect interest from some relatively newer developers and small-cap players who find the quantum affordable and easy to manage."
This will negate the risks for developers making their first foray into the residential market, he added.
Mr Ong said the top bid was 7.4 per cent above the $551 psf ppr paid for the adjacent Parc Riviera site as it is slightly superior, being farther from the Ayer Rajah Expressway.
The West Coast Vale site is also somewhat near the Jurong Lake District and malls like Jem.
Mr Sim said the site is in an enclave of private developments, an established area close to the park connector network along Sungei Pandan. "It requires the use of prefabricated materials which will help to keep a lid on construction costs."
Mr Ong noted that nine bidders was a good turnout for this site, which he regarded as mediocre as it is not near an MRT station.
He added: "As sales at Parc Riviera have not been brisk, with prices averaging around $1,200 psf, the subject development may have to be priced more competitively to achieve better sales progress."