AN ALL-IN bidding battle among 11 developers for a plum plot in Tiong Bahru ended up smashing price records for a residential site.
The land in Kim Tian Road drew a top bid of $550.28 million, or $1,163 per sq ft (psf) per plot ratio (ppr), from Keppel Land's Harvestland Development.
That is the highest price per square foot ever tendered for a purely residential site in the Government Land Sales (GLS) programme. It beat the old record set last August when Far East Organization offered $1,108 psf ppr, or $45.8 million, for a small Farrer Road site.
It also trumped analysts' predictions that the top bid would not exceed $920 psf ppr with no more than 10 bidders in the fray.
At over half a billion dollars, the total amount is also among the largest sums ever bid for a GLS residential site.
The next two bids also went through the roof - a Far East Organization-led consortium offered $1,085 psf ppr, or $513.3 million, while a City Developments-led group put up $1,017 psf ppr, or $481.1 million.
While experts were surprised at the sheer size of the bids, they noted that developers are fighting tooth and nail to get well-located sites near MRT stations and to boost their land banks.
The fact that three of the 11 tenders were above the $1,000 psf ppr mark "indicates that some developers are still very bullish on the middle to high-end residential market segment", said SLP International research head Nicholas Mak.
The bullish top bid for the 99-year leasehold site comes despite government efforts to reduce land prices, including offering more sites for tender and having tenders for multiple sites close on the same day.
The plot is 118,302 sq ft with a maximum gross floor area of 473,214 sq ft. The number of homes is capped at 500, due to traffic considerations.
Analysts noted that Tiong Bahru, a city-fringe heritage estate with art deco-style houses, has been revitalised in recent years by hip eateries and boutique retail outlets. It is also very near Orchard Road and the Central Business District.
DWG senior manager Lee Sze Teck said the developer could tap pent-up demand in Tiong Bahru considering that the last major project launch there was The Regency At Tiong Bahru, a freehold 158-unit condominium, in 2006.
There has also been a limited supply of new residential plots.
CBRE Research associate director Desmond Sim noted that GLS sites in Tiong Bahru have been few and far between.
The most recent one sold in March 2003 and was developed into the Meraprime condo.
Keppel Land said it plans to develop the Kim Tian Road site into about 500 homes, ranging from 500 sq ft to 1,350 sq ft in one- to four-bedroom configurations.
It will be its first project in Tiong Bahru, said Keppel Land's president for Singapore, Mr Tan Swee Yiow, in a statement.
Mr Mak said Keppel Land is expected to incur higher than usual building costs due to site regulations and restrictions. These include varying maximum building heights. Some buildings will be capped at six storeys, some at 25, some at 30 and some at 40.
Mr Mak estimates the break-even cost at $1,740 to $1,800 psf while DWG's Mr Lee puts it at between $1,500 and $1,550 psf with sale prices at $1,800 to $1,850 psf.