Upper Paya Lebar Road's "healthy" bid results reveal market sentiment

Bid numbers and prices tell a story.

The tender for the first condominium site of the year, located on Upper Paya Lebar Road, closed with healthy interest from seven bidders, according to Colliers International.

UOL Overseas Investments Pte Ltd topped the list at $392.30 million or $648 per sq ft per plot ratio - 3.7% and 13.7% higher than the second and third highest bids.

"The healthy level of participation by developers shows emphatically that a well-located site that is within walking distance to major transportation nodes will still attract a reasonable level of interest, despite a slowdown in new private home sales as a result of the introduction of multiple cooling measures including the Total Debt Service Ratio (TDSR)," said Colliers International.

The site is located near to the Bartley MRT station and the popular Bartley Residences and Bartley Ridge projects that are currently under construction. Additionally, the site is within close proximity to the established Maris Stella Primary and Secondary schools.

However, Colliers International noted the gap in tender bid prices between the highest two bids and the rest of the bids. The prices "indicate a difference in developers’ assessment of the market going forward, given that the private residential market in 2014 is expected to be more tentative as home-buying sentiment turns increasingly cautious."
At a land price of $648 per sq ft per plot ratio, the estimated break-even cost could range from $1,000-$1,100 per sq ft, said Colliers Interntiaonl.

When units at this project are ready for launch, the selling price could start from $1,200 per sq ft, it added.

From July to December 2013, the median price of units selling at the nearby Bartley Ridge is $1,222 per sq ft.