Silat Avenue GLS site receives sole bid of $1.035 billion, Mattar Road draws 10 bids

The tender for Silat Avenue government land site closed on April 26 with just one bid. The sole bid of $1.035 billion or $1,138 psf per plot ratio (ppr) came from Singapore-listed UOL Group in a joint venture with sister companies, United Industrial Corp and Kheng Leong Company.

The 245,975 sq ft government land site at Silat Avenue, is located just off Kampong Bahru Road, and has the potential to yield an estimated 1,125 residential units. “Developers tend to be cautious when it comes to bidding for sites with more than 1,000 residential units,” notes Desmond Sim, CBRE head of research for Singapore and South East Asia.

The absence of other major developers in the Silat Avenue tender is also indicative that their attention had been diverted elsewhere, namely to the Holland Road GLS site, says Sim. At the close of the Holland Road GLS residential-and-commercial site a month ago, 15 bids were received, with many major developers submitting multiple bids.

The Holland Road GLS tender is a two-envelop system, with the first envelope based on design submissions and the second, on bid price. The design presentations were made last week, says Sim. “Those who had bid for the Holland Road site would therefore abstain from bidding for the Silat Avenue site, because what would happen if they were to win both sites, and they are both big sites?”

Ong Teck Hui, JLL national director of research and consultancy says it’s not just the huge capital outlay, but the presence of five existing conserved buildings on the site that have to be retained and restored. This in turn could pose some constraints, he adds.

Based on this bid of $1,138 psf ppr, Tricia Song, Colliers International head of research for Singapore estimates a breakeven of $1,600 psf ppr, and selling price of the new project to be in the range of $1,800 to $1,900 psf.

Due to its palatable size (250 homes) and proximity to Mattar MRT station, the Mattar Road site tender drew the most number of bids, says Tricia Song, Colliers International head of research for Singapore. It attracted 10 bidders, which included a mix of big and smaller developers.

The top bid of $223 million or $1,109 psf per plot ratio (ppr) came from a consortium made up of three listed construction and property companies, namely Hock Lian Seng Holdings, Keong Hong Holdings and TA Corp. Based on the bid price, the breakeven is expected to be around $1,600 psf ppr, and selling price in the range of $1,750 to $1,800 psf.

The price for the site is higher than expected, says Ong Teck Hui, JLL national director of research & consultancy. The narrow margin of 5.5% among the top five bidders shows how keen competition was among them, he says.

The main attraction of the site is its proximity to Mattar MRT station on the Downtown Line, which provides easy connection to the city and other areas, adds Ong. “The keen bidding for the Cuscaden Road and Mattar Road land parcels tells us that demand for attractive residential sites is still buoyant. With such keen demand for sites, the en bloc market is likely to stay firm as it continues to be the main source of residential land supply over GLS. “