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Thread: FCL makes $955.4m bid for ex-Zouk site

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    Default FCL makes $955.4m bid for ex-Zouk site

    FCL makes $955.4m bid for ex-Zouk site

    Dec 6, 2017

    It beats out 9 rivals for Jiak Kim St plot, while Allgreen tops all bids for Fourth Avenue parcel

    Lynette Khoo


    Frasers Centrepoint Limited (FCL) trumped nine other bidders with an offer of $955.4 million for a residential plot in Jiak Kim Street, the former site of popular nightspot Zouk.

    And Allgreen Holdings emerged top among seven bidders for a residential parcel in Fourth Avenue, lodging a tender of $552.96 million.

    The two 99-year leasehold sites were on the Reserve List of the Government Land Sales programme and were triggered for public tender after minimum acceptable bids were made.

    The 13,482 sq m site in Jiak Kim Street comes with commercial use on the first floor. FCL's bid for the site translates to $1,732.55 per sq ft per plot ratio (psf ppr), only 0.6 per cent above the bid from Hong Leong Holdings and Hong Realty, which are controlled by Singapore tycoon Kwek Leng Beng.

    This toppled the last high of $1,239 psf ppr achieved at the site for GuocoLand's Martin Modern in June last year by a stark 39.9 per cent.

    The $552.96 million bid by fellow tycoon Robert Kuok's Allgreen Holdings for the 18,532.2 sq m site in Fourth Avenue reflects a land rate of $1,540 psf ppr, which is 2 per cent above the second-highest bid, from Bukit Sembawang Estates.

    Allgreen Properties picked up two collective sale sites in Bukit Timah last week, including Royalville.

    The bullish bids come after warnings from the Government on over-exuberance in the property market.

    "Despite the authority flagging the risk of excessive exuberance... the bidding for choice sites has not shown any sign of slowing," said Cushman & Wakefield research director Christine Li.

    Ms Tricia Song, research head for Singapore at Colliers International, said the strong showings for the Jiak Kim Street and Fourth Avenue sites "clearly reflect bidders' confidence in a recovering... market amid the positive economic outlook".

    Frasers Centrepoint Singapore chief executive Christopher Tang said the Jiak Kim Street site is "a rare location in a cosmopolitan locale, filled with rich heritage and character, sitting right on the edge of the Singapore River".

    Market watchers felt that the aggressive price Allgreen paid for Royalville could have deterred some developers from bidding for the site in Fourth Avenue. Still, having seven bidders is considered a respectable showing, Ms Li said.

    JLL head of research and consultancy Tay Huey Ying noted that the batching of tender closings for the two sites "appeared to have helped spread the competition for each site, and potentially taming the bids somewhat".

    She added: "Interestingly, local developers continue to maintain their hold on the prime district market, pipping foreign developers such as China's CSC Land and Hong Kong tycoon Li Ka-shing's Japura for the two sites in Jiak Kim Street and Fourth Avenue, respectively."

  2. #2
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    Default Two tender closings signal developers' unabating land appetite

    Two tender closings signal developers' unabating land appetite

    FCL leads Jiak Kim Street tender with S$955.4m bid; Allgreen emerges tops for Fourth Avenue site with S$552.96m bid

    Wed, Dec 06, 2017

    Lynette Khoo


    DEVELOPERS' appetite for choice sites has shown no signs of letting up despite warnings from the government on over-exuberance in the property market.

    Two residential land parcels at Jiak Kim Street and Fourth Avenue under the government land sales (GLS) programme saw keen contest on Tuesday, with Frasers Centrepoint Limited (FCL) setting a new price benchmark for the Jiak Kim Street site.

    The Singapore-listed developer topped 10 bidders with its S$955.41 million tender or S$1,733 per square foot per plot ratio (psf ppr) - the highest land rate achieved for a pure residential GLS site and residential with commercial on the first storey site.

    This marks a stark 39.9 per cent jump from the last high of S$1,239 psf ppr that GuocoLand paid for the site at Martin Place last June, where it is developing Martin Modern.

    Robert Kuok's Allgreen Properties, which already scooped up two collective sale sites at Bukit Timah area last week, zeroed in on the site at Fourth Avenue with a top bid of S$552.96 million.

    Beating six other bidders, its tender reflects a bullish land rate of S$1,540 psf ppr. But this is dwarfed by the benchmark price already set in the area by its en bloc purchase of Royalville for S$1,960 psf ppr last week. The two 99-year leasehold GLS sites were originally on the Reserve List of the Government Land Sales programme and were triggered for public tender after the government received minimum acceptable bids for them. The 13,482 sq m site at Jiak Kim Street, the former site of popular nightspot Zouk, comes with commercial use on the first floor.

    "Despite the authority flagging the risk of excessive exuberance in the property market and the simultaneous closing of two large state land tenders, the bidding for choice sites has not shown any sign of slowing," said Cushman & Wakefield research director Christine Li.

    She noted that based on the median selling price of Martin Modern at S$2,343 psf in October, FCL is probably pricing in a slight appreciation of around 6-7 per cent for the selling prices of the future development.

    Tricia Song, who heads research for Singapore at Colliers International, believes that FCL is projecting a rise of 10 per cent in average selling price for residential units at Jiak Kim Street over the median price for nearby Martin Modern in October. "The bullish bids for Jiak Kim Street site came on the back of its attractive locational attributes, limited supply of development sites in the area and brisk home sales in the vicinity," Ms Song added.

    Half of the 10 bidders also submitted bids within a tight band for Jiak Kim Street site, she pointed out. FCL's bid came in at only 0.6 per cent above the second-highest bid from Hong Leong Holdings and Hong Realty, controlled by Singapore tycoon Kwek Leng Beng.

    Citing strong locational attributes of the site, Frasers Centrepoint Singapore CEO Christopher Tang said that it is "a rare location in a cosmopolitan locale, filled with rich heritage and character, sitting right on the edge of the Singapore River".

    Since the site includes three conserved warehouses constructed around 1919, Frasers will be exploring sustainable ways to adapt these iconic structures for lifestyle and creative commercial uses, he said. The group will also deploy the Prefabricated Prefinished Volumetric Construction (PPVC) method in developing the site.

    Market watchers felt that the aggressive price that Allgreen paid for Royalville could have deterred some developers from bidding for the site at Fourth Avenue. Still, having seven bidders are considered a respectable showing, Ms Li said, adding that the new development may have to sell at around S$2,250 psf assuming developer's profit margin of around 10 per cent of the gross development value.

    JLL head of research and consultancy Tay Huey Ying believed despite the keen contests, the batching of tender closings for the two sites may have helped spread the competition for each site, and potentially taming the bids somewhat.

    "This is the first time since May 2017 when a GLS residential land tender attracted less than ten bids," she said. "Interestingly, local developers continue to maintain their hold on the prime district market, pipping foreign developers such as China's CSC Land and Hong Kong tycoon Li Ka-shing's Japura Pte Ltd for the two sites at Jiak Kim Street and Fourth Avenue, respectively."

    For the second time, Singapore-listed City Developments Limited and Hong Kong-listed Logan Properties joined hands to bid for land here. They came in sixth for the site at Jiak Kim Street.

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