Top bids for Upper Serangoon Parcels A & B reveal developer strategy

Intent to landback evident, says Colliers.

Kingsford Development Pte Ltd topped the bidding at both tenders for Upper Serangoon View Parcels A & B at $522 per sq ft per plot ratio for both sites, translating to $258.8 million and $201.6 million, respectively.

Colliers International said the notably higher bids -- Kingsford Development’s top bid for Parcel A is 16% above the second highest bidder and 24.9% above the third highest bidder; while for Parcel B, its bid is 12.7% and 15.8% higher than the second and third highest bids, respectively -- suggest the developer's plans.

"While the bids seem bullish amid current buying sentiments, it indicates the developer’s intention to land bank, to cement its position and to minimise price competition it could potentially face in the vicinity," said Chia Siew Chuin, Director of Research & Advisory at Colliers in a comment after the Urban Redevelopment Authority announced the tender closing for both sites.

At a land price of $522 per sq ft per plot ratio, the estimated breakeven cost for the proposed developments on both sites could range from $860-$920 per sq ft and the selling price could start from $1,000 per sq ft.

Chuin also drew attention to the number of bidders that flocked both tenders.

"Despite the slowdown in new private home sales as a result of the Total Debt Service Ratio (TDSR), the tenders for the two adjoining non-landed residential sites at Upper Serangoon View drew healthy interests from eight contenders each," she reckoned.

The tenders for both land parcels came after a two-month hiatus since the last private residential site located at Mount Sophia that was sold in September 2013.