Hotly-contested Toa Payoh tender wakes developers from bidding slumber

The highest bid won by a razor-thin margin.

A highly-attractive residential site in Toa Payoh roused developers from their bidding slumber when it garnered a total of 14 bids last week.

According to analysts, the healthy number of bids was unsurprising in light of the drastic cutback in the 2H15 Government Land Sales (GLS) program and the site’s location within a well-established mature estate.

“The site is located at one of the key access points to Toa Payoh estate. The developer should be able to garner healthy interest for the project, particular from upgraders who are currently living in the estate,” said Desmond Sim, Head, CBRE Research, Singapore and South East Asia.

Chua Yang Liang, Head of Research and Consultancy at JLL Singapore, noted that the highest bid won only by a razor-thin margin.

“The gap between the winning bid and the next highest is a close call of only 1.1% - the lowest gap we have seen since 2Q2014 when a site at Choa Chu Kang Drive was awarded to Sim Lian Land at a margin of 2.2% over the next bidder. The tightness of these recent bids could reflect a more consistent view among the developers regarding the market conditions going forward coupled with the fact that the area is more mature and there are possibly more transactional data to help developers assess market demand more consistently,” he said.

Chua expects that the project could be launched at a price range of $1,350 – 1380 psf, assuming a construction cost of $300 psf.

“This is within the market expectations given the recent average prices of existing projects nearby e.g. Trevista (closest) at an average resale price of about SGD 1,309 psf, Sky@Eleven about SG 1,723 psf, and Trellis Towers at SGD 1,374 psf,” he said.