CHINESE developer MCC Land seems to regard Tampines as its own turf, going by the fight it has put up for a site in the area.
The firm, which is developing The Santorini in Tampines Avenue 10, has lodged the top bid in a 12-horse race for a plot along the same road.
MCC Land's offer of $227.78 million or $482.59 per sq ft per plot ratio (psf ppr) was just 7 per cent over the second highest offer of $451.04 psf ppr lodged by Malaysian tycoon Robert Kuok's Allgreen Properties.
The 12 bids in the tender which closed yesterday are a "healthy number as developers are running low on land", said Mr Desmond Sim, CBRE's research head for Singapore and South-east Asia.
"Bidders were probably spurred on by the very palatable, affordable total quantum," he added.
The 99-year leasehold site of roughly 1.57 ha can support an estimated 490 homes.
But the value of the bids shows that developers remain cautious, said Rodyk & Davidson partner Lee Liat Yeang.
Just three were above $438 psf ppr, which is the lowest winning bid for a Government Land Sales site in the past two years. That was for a Fernvale Road site in August last year.
"There may have been a bit of bottom fishing," said Mr Lee. The lowest bid - at $269.89 psf ppr - came from Edition Land, a subsidiary of Singapore Exchange-listed Edition Limited.
The last land tender in the area was for The Santorini site, in July 2013. It was won by MCC Land with a bid of $562 psf ppr.
Bids at yesterday's tender averaged $390 psf ppr, significantly lower than the average of $434 psf ppr for The Santorini plot, said JLL national research director Ong Teck Hui.
Mr Lee noted that while the top bid this time is about 14.1 per cent lower than that for The Santorini plot, construction costs have run up since then.
Units at The Santorini were launched last year at a median price of $1,108 psf. The 597-unit development has 418 unsold units.
But, Mr Ong said, nearby Q Bay Residences, which was launched in 2013, is fully sold at an average price of $1,043 psf.
MCC Land's estimated breakeven price for the new project is $980 to $1,040 psf, said SLP International executive director Nicholas Mak, who also noted that the site poses challenges.
These include a large industrial B2-zoned plot just across the road.
There could also be strong leasing competition from four condos and one executive condominium in the area, representing about 3,000 units in all.
A site next door on the reserve list that could accommodate 675 units presents potential competition as well, added OrangeTee research manager Wong Xian Yang.
An MCC Land spokesman said it plans to develop a condo of about 500 units.
He noted that Tampines Regional Centre has many "recreation, residential, economic and educational developments" and is set to become an "even shinier jewel of the East... more home buyers should be drawn to its future prospects".
The Straits Times / Money Published on Wednesday, 29 April 2015
By Rennie Whang
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