First GLS tender of the year garners lukewarm response from cautious developers

There were only five bidders for the site.

The first government land sales tender for the year was fairly lukewarm, with only five bidders participating in the tender for the commercial and residential development site at Yishun Avenue 4.

The highest bid was pegged at $185.09m or $629 per sq ft per plot ratio, and was tendered by Northern Resi and Northern Retail. This was a marginal 1.9% above the second highest bid tendered by KBD Ventures and Changi Properties.

According to Colliers, the muted interest among the contenders in the current site is likely to have been the result of weakened sentiments in the private residential property market as well as the requirement for the commercial component of the subject development to be held under a single strata lot to be vested in a single owner at all times.

“This disallows any strata subdivision of the commercial component during the lease term, which could have prompted a more cautious stance and bidding strategy among developers due to the more restrictive investment exit options available,” said Chia Siew Chuin, Director of Research & Advisory at Colliers.

Colliers estimates that the expected breakeven price for the residential component of the subject development is estimated to be about $950 to $1,000 per sq ft, and depending on the state of market sentiment when the project is ready for launch, the selling price could range between $1,050 and $1,150 per sq ft.