Government may have hurt Dairy Farm Road bidding

New restrictions likely dragged down the condo site's top bid, says Colliers.

Colliers International commented that the top bid from the First Shine Properties Pte Ltd and Meadow’s Bright Development Pte Ltd came in at S$244.318 million or S$616 per sq ft per plot ratio, which is 3.5% lower than the S$638 per sq ft per plot ratio paid for the neighbouring site at Hillview Avenue awarded in March 2012.

"The lower per sq ft per plot ratio price for today’s bid could, in part, have been influenced by the new guideline placed on the maximum number of homes allowable in suburban areas based on an average size of 70 sq m per unit," it said.

Here's more from Colliers International:

Fuelled by the continued low interest rate environment and the site’s proximity to the upcoming Hillview MRT on the Downtown Line 2, the tender closing for the condominium site at Dairy Farm Road saw keen competition from nine contenders.

The site is also near to the nature reserve and is supported by nearby amenities such as The Rail Mall and reputable schools. Future potential buyers of new units on the site will also be able to look forward to facilities available at the Bukit Panjang HDB estate and the nearby HillV2 shopping mall, to be completed around 2014.

A tie-up between First Shine Properties Pte Ltd and Meadow’s Bright Development Pte Ltd topped the list at S$244.318 million or S$616 per sq ft per plot ratio, which is 9.9% and 12% above the second and third highest bids, respectively.

Nonetheless, the top bid is 3.5% lower than the S$638 per sq ft per plot ratio paid for the neighbouring site at Hillview Avenue awarded in March 2012. The lower per sq ft per plot ratio price for today’s bid could, in part, have been influenced by the new guideline placed on the maximum number of homes allowable in suburban areas based on an average size of 70 sq m per unit.

Based on a land cost of S$616 per sq ft per plot ratio, the breakeven price is likely to be around S$950-S$1,050 per sq ft, and units in this project could launch from S$1,200 per sq ft onwards. The median price achieved for units sold at the nearby The Hillier in the first 9 months this year was in the region of S$1,300 per sq ft.