THE top bid for a residential site opposite West Coast Park came in at $175.78 million or $461 per square foot per plot ratio (psf ppr) yesterday, falling below market expectations.
When the government launched the tender for the 99-year leasehold site at West Coast Link/West Coast Crescent in early May, consultants predicted a top bid of $495-530 or even $560-580 psf ppr.
While the tender did not stir things up on the price front, it did garner considerable interest with 12 developers gunning for the site. And there was a close fight among the top few bidders. Far East Organization submitted the highest bid - just 1.1 per cent above Centurion RE's offer of $456 psf ppr.
A tie-up between Hong Leong Holdings and City Developments followed with a bid of $450 psf ppr. Other participants included MCL Land, Allgreen Properties and Tuan Sing Holdings.
Analysts are divided over what the tender results hold for the property market. Colliers International research and advisory director Chia Siew Chuin believes that developers expect prices to soften. Her estimates put the breakeven cost at $800-840 psf and the average selling price at $900-940 psf, but projects in the area are selling for more, she said. At The Vision next door, for instance, a unit went for $1,106 psf in May.
Savills Singapore research and consultancy associate director Alan Cheong has a different take. Far East's bid would reap a profit margin of about 27 per cent if units can be sold at current prices, he said. 'This means that the developer needs to sell only about 73 per cent of the net saleable area to break even.'
Credo Real Estate executive director Ong Teck Hui noted that interest in the West Coast site was 'definitely keen', but bids were 'measured and not excessive'. He cited the site's amenities and sea view as attractions.
'Developers could have become more selective,' he said. 'Mediocre sites could see a low interest level with subdued bids while more attractive sites are able to generate stronger participation with moderate bidding,' he said, projecting a breakeven cost of around $850 psf and an average selling price of around $1,000 psf.
Far East development and planning executive director Chng Kiong Huat said that there are plans for a project comprising one tower of service apartments, a second tower of one to four-bedroom apartments, and possibly some townhouses.
Far East owns and operates a service apartment project nearby which has seen consistently high demand, he said. 'We see a need for a service residence in this area to serve the expatriates and transient business visitors working on Jurong Island, in Jurong Port as well as in the science and technology corridor in one-north, Singapore Science Park and renowned tertiary institutions in the vicinity.'