Tepid response to Mount Vernon Road tender explained

CBRE and Colliers International cite three possible culprits to the lukewarm bidding results.

The recent Government Land Sales tender for Mount Vernon Road received only five bids despite its prime location.

"The uncertainties surrounding the introduction of the Additional Buyer's Stamp Duty to curb foreign buying and investment demand, the ample supply of GLS sites in the 1H 2012 GLS Programme as well as the economic condition, may have also resulted in the moderate level of interest and a more cautious bidding by the five contenders for the site," Colliers said.

A consortium comprising the Hong Leong Group, City Developments Limited and TID Residential Pte Ltd topped the list with a bid of $388.11 million or $495.02 per sq ft per plot ratio (psf ppr),

According to Colliers, the bid is also 20.2% below the $620.61 psf ppr paid for the nearby site located on Bartley Road when it was sold in April 2011.

“Response to the tender of the residential site at Mount Vernon reflects the cautious attitude of developers following the latest property measures introduced in December 2011 and in anticipation of a slowing economy in 2012," CBRE concurred.

"Only five bids were submitted for the site even though it is a very accessible location. This is fewer than the eight bids garnered for the site directly opposite the subject site in April 2011. The top bid of $388.106 million or $495 psf/plot ratio is also 20 per cent below the $621 psf/plot ratio awarded to the same party," it added.