Upper Serangoon Crescent’s top bid a mere $270.28m

The top bid of $270.28 million ($291 per sq ft per plot ratio) and the lukewarm three-party contest seen for the tender of the non-landed residential site on Upper Serangoon Crescent/Upper Serangoon Road reinforce developers’ increasingly cautious market outlook amid heightened market uncertainties.

The close succession of tender closings for the subject site and a similar plot at Punggol Way / Punggol Field (tender closed on 1 September) could have contributed to the tepid response to the subject site. Both plots of land are located within the north-eastern Punggol/Sengkang/Buangkok/Upper Serangoon suburban neighbourhood.

The top bid of $291 per sq ft ppr is the lowest unit land price recorded since August 2009 – when the private residential property market was just in the nascent phase of recovery after hitting the trough. In August 2009, a non-residential site situated at Chestnut Avenue was sold to City Development Limited and the Hong Leong Group for $280 per sq ft ppr.

The top bid of $291 per sq ft ppr is also about 9.1% lower than the $320 per sq ft ppr achieved for a non-landed residential plot located nearby at Serangoon View when it was sold to a consortium including Frasers Centrepoint, Far East Civil Engineering (Pte.) Limited and Sekisui House, Ltd. in November 2010.

Based on the land cost of $291 per sq ft ppr and the prevailing average selling price of newer units located in the area, a new project at the subject site could break even in the region of $600 per sq ft. This should provide the developer some level of safeguard amid signs of a softening market.