Bukit Batok Condo – 11 bids for mixed-use Bukit Batok site

A site in Bukit Batok – the only mixed commercial and residential plot tender under the Government Land Sales programme for the first half of this year – has attracted 11 bids.

But while interest in the 14,696.7 sq m plot in Bukit Batok West Avenue 6 and near Bukit Batok MRT station was broad, analysts noted that some developers were more measured than others in their bidding.

Mr Desmond Sim, head of CBRE Research for Singapore and Southeast Asia, said: “Interest in the site was keen as shown by the 11 bids. This is testament to developers’ hunger for land. However, the difference in each developer’s market outlook and appetite is reflected by the wide margin in bid pricing of up to 60 per cent.”

The tender closed yesterday with the top bid of $301 million or $635 per square foot per plot ratio (psf ppr) submitted by Qingjian Realty (South Pacific) Group, said the Urban Redevelopment Authority in a statement.

That was just 8.3 per cent above the second-highest bid, which was submitted by Allgreen Properties.

“Many of the bidders were mindful of the current market conditions and submitted fairly conservative bids,” said SLP International executive director Nicholas Mak, noting that the top bid was also 5.7 per cent lower than the winning bid for a comparable land parcel in Hillview Avenue in April 2011, which is where The Hillier condo has been built.

It was also 21.2 per cent lower than the winning bid for another comparable land parcel in Jelebu Road in November 2011, now the site of Hillion Residences condo.

Even so, Mr Ong Teck Hui, JLL national research director, noted that Qingjian’s $635 psf ppr was at the “upper end of expectations”.

This could be due to more favourable new-home sales in the past two months, and that mixed developments tend to find ready demand from home buyers, he said. The government did not sell any mixed development sites last year.

Mr Sim said: “At the moment, the built-up density in the surrounding areas is low, and bidders are probably looking to gain a first-mover advantage when this precinct starts to intensify through future developments (such as) the upcoming Jurong Innovation District.”

If the site is awarded to Qingjian, it will be the developer’s first mixed development project in Singapore, and its second successful land acquisition for private housing development this month.

Last week, Qingjian announced that it had entered into a sales and purchase agreement with the residents of Shunfu Ville, at a collective price of $638 million. Qingjian said in a statement that it expects to build about 500 condo units at the Bukit Batok site, which has a gross floor area of 44,091 sq m.

At a land price of $635 psf ppr, Mr Mak estimates the breakeven prices for the residential units will range from $920 to $980 psf.

He noted that there are few new 99-year leasehold private non-landed residential developments near the Bukit Batok site, but the median transacted prices of units in three such condominiums (Hills TwoOne, Hillsta, and Kingsford Hillview Peak) in the Bukit Batok planning area ranged from $1,199 to $1,326 psf in January to May last year.

by Marissa Lee in Straits Times 25 May 2016