Bidding was keen though measured for a mixed-use site in Alexandra View next to Redhill MRT station.
A total of 10 bidders participated in the tender which closed yesterday. The top bid of $376.88 million, or $851 per sq ft per plot ratio (psf ppr), was put in by Tang Skyline, part of Tang City Holdings or the Tang Group of companies.
It was just 1 per cent above the second highest bid of $373.1 million or $842 psf ppr, by a joint venture between Singland Homes and UOL Venture Investments.
"The top five bids were within a 4.8 per cent margin, with no-overenthusiastic bid," said Mr Ong Teck Hui, JLL national research director. While the site was attractive given its proximity to the MRT station and commercial component on the first storey, the top bid was at the lower end of expectations, he said.
The measured bidding may have reflected the significant level of unsold units in nearby projects, he added.
"Based on developer sales data in September, there are 177 unsold units in Alex Residences, 379 in The Crest while the 663-unit Principal Garden is still in the early stages of sales marketing."
The last tender in the area was the Principal Garden parcel in April last year, which fetched $821 psf ppr but is much farther away from the MRT station.
"(The restraint in bidding) becomes more apparent when compared to the $970 psf ppr fetched by the nearby Alex Residences site in December 2012, showing how much land price has fallen in the immediate vicinity."
Developers did not seem too perturbed by the fact that a cap of 400 residential units has been placed on a future project on the site, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia. The site is to include a maximum 21 commercial units, including a supermarket of at least 1,000 sq m. Smaller commercial units have been set at a minimum size of 50 sq m each.
Taking away the maximum commercial gross floor area (GFA) of about 2,000 sq m, this means a maximum average GFA per residential unit of about 98 sq m - far more than usual 70 sq m, Mr Sim noted.
"But a developer could still build some palatable, smaller-sized units, perhaps balancing this out with even larger units."
At the same time, the site allows serviced apartments, or a mix of both flats and serviced apartments.
If the parcel is awarded to the top bidder, estimated breakeven price for a residential development is about $1,350 psf to $1,400 psf given a land price of $851 psf ppr, said Mr Nicholas Mak, SLP International executive director.
"This would provide the developer with a comfortable profit margin based on the selling prices of comparable new condominiums in the vicinity, which ranges from $1,530 to $1,950 psf."