As we head into 12th July 2017, CEL Unique Development (A Joint Venture between Chip Eng Seng Corp, Heeton Holdings and KSH Holdings) won the land tender by Urban Redevelopment Authority, for the 1.95ha residential site on Woodleigh Lane, with the top bid of $700.7 million, or $1,110 psf per plot ratio (ppr), coming as first over the 14 others.
CEL Unique Development have also announced plans for the site citing that “they plan to build a condominium, comprising 16- storey blocks, with more than 800 units, on the site.”
Coming in as the second bidder was a Joint Venture between Keppel Land and Wing Tai Holdings at the price of $695 million of $1,101 psf per plot ratio (ppr) – It was just 0.8% below the top bid. The third-highest bid came from City Developments Limited (CDL), in a Joint Venture with renowned Chinese developer Logan Property Holdings, which is also listed in the Hong Kong stock exchange. In May, Logan Property, together with Chinese conglomerate Nanshan Group, won a large 99-year leasehold residential site on Stirling Road with a bid of over $1 billion, or $1,051 psf ppr.
Industry experts are saying that the bids from the top five bidders, whom submitted tenders above $1,000 psf ppr, reflected confidence and appetite for the site – according to Desmond Sim, CBRE head of research for Singapore and Southeast Asia.
CDL’s parent company, Hong Leong Holdings, and its subsidiary Hong Realty, were in eighth place with a bid of $603 million ($955 psf ppr)
The Woodleigh Lane site, within the upcoming Bidadari precinct, is also the second put up for tender and closed this year, CBRE’s Sim points out. Last month, the mixed-use site next to the Woodleigh MRT station was awarded to a JV between Singapore Press Holdings (SPH) and Kajima Overseas Asia, which submitted a bid of $1.13 billion, or $1,181 psf ppr.
The 99-year leasehold site on Woodleigh Lane has a gross floor area of 631,212 sq ft and plot ratio of 3.0, and it is estimated that 735 housing units can be developed on the site, according to URA. The site is adjacent to the Woodleigh MRT station and across the road from the mixed-use site won by SPH and Kajima.
Like the other Bidadari site, the top three bids for the Woodleigh Lane parcel were dominated by Singapore players, notes Nicholas Mak, head of research and consultancy for ZACD Group. “It looks like the big boys are reacting to the aggressive bids from the Chinese and Hong Kong developers,” he says.
Based on the top bid of $1,110 psf ppr, the developer’s break-even price is likely to be $1,650 to $1,730 psf, which means the new residential units will have to be priced above $1,800 psf, says Mak. Market expectation is that the SPH-Kajima residential units are also likely to be priced above $1,800 psf.
“While developers are bidding for sites at these prices, the question is: Will there be sufficient demand for the homes at these elevated prices?” he comments.
CBRE’s Sim reckons the market is able to absorb the new units at the elevated prices, based on the take-up rate at existing launches.