Middle Road and Sims Drive sites sold for $492m and $383.53m

They lured 10 and five bidders respectively.

The Urban Redevelopment Authority (URA) closed tenders for the two sites at Middle Road and Sims Drive. The winning bid for the land parcel at Middle Road went to Wingcharm Investment, a unit of Wing Tai Holdings, for $491.99m, whilst the winning bid for the land parcel at Sims Drive went to the group of Intrepid Investments and CDL Constellation for $383.53m.

A final decision on the award will be publicised at a later date after the bids have been evaluated.

Tricia Song, head of research for Singapore, Colliers International, commented that the Middle Road site (zoned residential with 1st storey commercial) garnered positive response with 10 bidders – the highest number of contenders for a residential GLS site since Mattar Road site in May 2018.

“Although the site was hotly contested, the bid prices were fairly conservative in our view, with the bulk of the bids bunched below $1,300 psf ppr,” Song said.

“The site fell within the Central Area, and hence will not be subject to minimum unit size. It can build 375 residential units and up to 1,500 sqm of commercial space on the first floor. There are two zones: the low-rise zone which can go up to six storeys, and a high-rise zone which can go up to 20 storeys. We expect a potential selling price of $2,200-2,300 psf,” Song added.

However, the five bids for the Sims Drive site came in as a surprise for Colliers International, given the site’s location in the city fringe and proximity to the Aljunied MRT station.

Song said, “We think a reason for the subdued bid prices could be the fact that the site is now subject to a larger minimum average unit size of 85 sqm. Developers may also be assuming some buffer for the five-year ABSD timeline, given its relatively larger plot size – 570 units can be built. We estimate the selling price could be $1,400 psf, even factoring in the potentially larger units.”

“It is clear from the results of recent Government Land Sales (GLS) tenders that the days of overly exuberant land bids are behind us,” the executive commented.

“The relatively conservative bids for the two sites – particularly for Sims Drive which fell short of our expectation – reflect developers’ measured approach toward land banking following the imposition of fresh property cooling measures in July 2018 amidst new guidelines on minimum private residential unit size which took effect in October 2018.”

 

Source: Singapore Business Review /PUBLISHED: 29 MAR 19


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