Jurong West landed plot not awarded

Published March 19, 2008

Jurong West landed plot not awarded


THE government yesterday said that it's not awarding a landed housing parcel in Jurong West - because the bids were too low.

When the tender for the 151,759 square foot site closed this month, there were just two bids. And the higher of the two was a low $11.8 million - or just $77.80 per square foot - in what was taken as a sign of an uncertain property market. That bid, from Boon Keng Development, was significantly below the $200-$250 psf of land area that analysts reckoned the site could fetch.

The other bid came from Sunway Concrete Products, a unit of Malaysia-listed Sunway Holdings. It offered $10.3 million, or $68.10 psf of land area.

Property analysts said then that there was a chance the government would not award the site, as has happened before when the highest bid was too low.

In January, for example, the government decided not to sell a short-term office site at Aljunied because the sole bid was too low. The move followed a string of lower-than-expected offers for state land.

'The decision is expected on the Jurong site, as the top bid was well below the market rate,' Cushman & Wakefield managing director Donald Han said yesterday. 'It would not have been justifiable to award the site, as it would have been a shockwave in terms of market value in that area.'

It is estimated that 50 to 60 landed homes can be built on the 99-year leasehold site in Westwood Avenue.

March 19, 2008

Low bids, so landed plot in Jurong not awarded

By Joyce Teo, Property Correspondent


IN A keenly watched move, the Government has decided not to award a landed housing site in Jurong West after only two bids came in - both way below expectations.

The top bid for the site, from Boon Keng Development, came in at $11.8 million, or $78 per sq ft (psf) of land area - less than half of what one consultant had expected.

The only other bid for the site, in Westwood Avenue, came from Sunway Concrete Products, which offered even less at $10.33 million, or just $68.10 psf.

The tender for the 14,098.9 sq m, 99-year leasehold site closed a week ago.

Property market watchers had been waiting with interest to see how the Government would respond to such low bids, given the recent slump in market sentiment.

After the boom times seen last year, sale volumes have fallen significantly as buyers and sellers remain on the sidelines.

Cushman & Wakefield managing director Donald Han, who had tipped that the site could have fetched $200 psf, said the Government had been wise not to award the site.

'If you award the site, there will be a downward adjustment of the valuation in the area,' he said.

The price would also be used as a benchmark for future tenders of such sites in the area, consultants said.

Said Knight Frank director (research and consultancy) Nicholas Mak: 'In a market with thin volume, tenders on the confirmed list could invite opportunistic bids.'

Sites on the Government's confirmed list are put up for tender on a specific date.

The Government also sells reserve-list sites, which are put up for sale only when a developer commits to bid a minimum price.

'There are buyers capitalising on the weak property market but there're no fire sales yet,' said Mr Han.

Earlier this year, the Government also chose not to award the tender for a transitional office site in Aljunied because the only bid it received was too low.

Mezzo Development had offered to pay $7.8 million - or a unit land price of $38.35 psf per plot ratio.

lol the government is protecting the value of properties even in times of turmoil..

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Originally Posted by Unregistered

lol the government is protecting the value of properties even in times of turmoil..

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developers try to make fool of the goverment. if they do it again, they will be black listed.

The chief valuer puts a fair value to land. Given today strong fundamental for Singapore, you can kiss good bye to firesale land sale prices.

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Originally Posted by Unregistered

The chief valuer puts a fair value to land. Given today strong fundamental for Singapore, you can kiss good bye to firesale land sale prices.

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Government sets the floor price and I think in this case, if you bid below $200 psf, it is a definite no go. Anyway, no thinking developer is keen on the Jurong West plot for landed 99 housing.