A Jalan Kandis condo site near Sembawang Park attracted nine bids yesterday in keen competition reflecting the affordable nature of the land.
Dillenia Land, a unit of Tuan Sing Holdings, submitted the top bid of about $51.1 million, or $481 per sq ft per plot ratio, for the 0.7ha plot.
This was just 1.8 per cent higher than the second-highest bid of $50.2 million by Qingjian Realty (Residential).
The relatively small plot size and and small number of units it will likely yield - about 110 - mean development risks will be lower, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia. A competitively priced project on the site would probably sell well, so a developer should have less fear about penalties for unsold units, Mr Sim added.
While the tender drew some smaller players, major developers also participated, including Malaysian tycoon Robert Kuok's Allgreen Properties.
The third-highest bidder, China's Nanshan Group, entered the Singapore market about three years ago and seems intent on acquiring more residential sites. It launched its maiden private condo project, Thomson Impressions, in October last year.
The total development cost for a project on the Jalan Kandis site is likely to be below $100 million. Units should be priced at $1,000 psf or lower to sell well, based on market conditions now, said Mr Ong Teck Hui, JLL national research director.
Buyers could include upgraders from nearby estates in the Sembawang and Canberra area, he said.
"Although the site is not near transportation nodes or amenities, it is still attractive, being in a predominantly landed housing estate surrounded by greenery."
Many bidders for the site have been regularly participating in GLS tenders, said Mr Lee Liat Yeang, Rodyk & Davidson partner in real estate practice. "Many developers need fresh land for development to keep their businesses going... There are also fewer GLS land tender sales this year compared with last year or 2014," he said.
Tuan Sing chief financial officer Chong Chou Yuen noted after yesterday's tender closing that while the company has land bank in China and Perth, it has none left in Singapore. "As a Singapore-based company, we would still like to have trading properties here and we think our bid price is fair," he told The Straits Times.