CDL leads pack as bullish bids continue at government land tenders

The past fortnight has seen a flurry of not just the close of tenders for collective sale sites but also for 99-year leasehold sites sold under the government land sales (GLS) programme.
Jan 30 marked the tender closing of three residential sites: on Handy Road across from Plaza Singapura shopping centre and the Dhoby Ghaut MRT interchange station; West Coast Vale, off West Coast Road; and Chong Kuo Road, off Sembawang Road.
While the batch tender closing of three residential sites has dispersed competition among developers — with six to 10 bids received versus an average of 13 bids for sites awarded in 2017 — “developers across the board continue to price in a continued recovery in end-residential prices, with estimated breakeven prices at or above market prices today”, notes Louis Chua, Credit Suisse analyst, in a report on Jan 31. “Rising land bids will continue to be the catalyst for higher prices from 2018.”
CDL a big winner
Following its $906.7 million en bloc purchase of Amber Park in October 2017, listed giant property group, City Developments (CDL) emerged the top bidder for two of the three GLS sites that closed on Jan 30: The Handy Road site in prime District 9, for which it submitted a bid of $212 million ($1,722 psf per plot ratio); and the West Coast Vale site, for which it bid $472.4 million ($800 psf ppr).
There were 10 bids for the Handy Road GLS site, and six for the West Coast Vale site. For the Handy Road site, CDL won by a margin of 12.3%, while the margin for the West Coast Vale site was a narrower 0.7%.
“We have been very selective and see great potential in the two sites,” Sherman Kwek, CDL group CEO said in a statement on the evening of Jan 30, upon winning the two sites. “As Singapore’s residential market begins to gradually recover, we will continue to seek suitable opportunities to increase our local landbank.”
CDL also announced its plan to build a 200-unit residential development on the Handy Road site, comprising three blocks spanning eight to 10 storeys, with basement parking. A conserved building on the site will be converted into a clubhouse. Meanwhile, the West Coast Vale site will be developed into twin 36-storey towers with about 730 apartments and basement carpark.
City Developments beat 10 bidders with its bid of $212 million ($1,722 psf ppr) for the Handy Road site (Credit: URA)