SINGAPORE (EDGEPROP) - The batched tender for three Government Land Sales (GLS) sites that closed on September 5 were all for residential development, with commercial use on the first storey. The sites are at Bernam Street in Tanjong Pagar, one-north Gateway and Tan Quee Lan Street in the Beach Road-Rochor Road area.
“The sites are all of different attributes in terms of location and plot sizes, thereby, attracting developers with varying budgets and market segment focus,” notes Desmond Sim, CBRE head of research for Southeast Asia. “This batched tender presents an array of options to developers, should they want to replenish their landbanks.”
However, this means that developers’ focus was divided across three sites, which may have “diluted the tender bids and participation rate”, notes Christine Li, Cushman & Wakefield (C&W) head of research for Singapore and Southeast Asia. This could have resulted in tender bids coming in lower than expected, she points out.
“The bids in this batched tender contrast with the current reading of the residential market of strong home sales and record prices set in many locations,” says C&W’s Li.
The site on Tan Quee Lan Street received just two bids, while the one on Berman Street attracted four bids. The site at one-north Gateway saw the highest number of bidders, that is, nine bids.
“It appears that the smaller the capital requirement, the higher the number of bidders,” says Nicholas Mak, ERA Realty head of research & consultancy.
The theme to sum up developers’ mindset from the batched tender results was “Safety first”, says Tricia Song, Colliers International head of research for Singapore.
The result for the site at Tan Quee Lan Street was “particularly surprising”, notes Song. Located in Bugis, it was “widely anticipated to witness stiff competition among developers”. However, it attracted just two bids, which, she says, “turned out to be a bit of an anti-climax”.
Song attributes the lukewarm response to the Tan Quee Lan and Bernam Streets GLS sites to “developers’ concerns over the macroeconomic headwinds and weaker economic outlook ahead”.
One-north Gateway’s popularity on the other hand, could be due to its size: As the smallest residential development site on the Confirmed List of the GLS programme, it has the potential to yield about 165 units, says Song.
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