The bullish bids lodged for a plot in Perumal Road are a clear sign developers remain hungry for sites.
The land attracted 11 bids with an offer of $174.08 million from Low Keng Huat leading the pack, the Urban Redevelopment Authority said yesterday.
Its bid was about 4.4 per cent higher than the $166.7 million tabled by China Construction (South Pacific) Development.
The Perumal Road site - with room for 200 private apartments and commercial space on the first floor - was expected to garner keen interest when it was released for sale last November.
"Developers are clearly looking to replenish their depleting inventory and the Perumal Road plot offers the added bonus of a small size and, therefore, an affordable quantum of $174 million," noted Mr Desmond Sim, head of CBRE Research for Singapore and South-east Asia.
The 99-year leasehold plot has a land area of 3,847.8 sq m and maximum gross floor area of 16,161 sq m.
Developers have been more aggressive with bids in recent years as the Government has cut the supply of development sites to stabilise the property market.
Cushman & Wakefield research director Christine Li noted that the top bidders continue to place above-market offers in order to have a "sure-win" at government tenders.
"It is noteworthy that out of the 11 parties who tendered for the site, nine bid higher than the top bid for the nearby site (Sturdee Residences) in March 2015," Ms Li added.
The leading bid from Low Keng Huat of $1,000.7 per square foot per plot ratio (psf ppr) for the Perumal Road site is 27 per cent higher than the $787 psf ppr lodged for the Sturdee Residences plot.
Consultancy JLL noted that the bullish bidding reflects "a positive market outlook" among developers amid rising transaction volumes and a slower pace of decline in home prices.
The postponement of the sales launch for the confirmed-list site in Upper Serangoon Road last month may also have resulted in some spillover interest in the Perumal Road plot.
The site is near the Farrer Park MRT station and commercial amenities such as City Square Mall and Mustafa Centre.
"The private residential market is showing signs of stabilising and may very possibly recover by 2018. This would coincide well with the launch of the Perumal project," said Mr Wong Xian Yang, head of research and consultancy at OrangeTee.
Analysts put the potential average selling price for units at above $1,700 psf, based on the high land price submitted.
The URA said a decision on awarding of the tender will be announced at a later date.