Keen interest seen for Martin Place site

A RARE District 9 private housing site being offered at a state tender is generating much buzz in the market.

The developer of the nearly 1.6-hectare site located at the corner of Martin Place and River Valley Close may build 450 units at most – subject to a maximum gross floor area of 480,306.75 square feet.

Part of the site has a 20-storey height restriction, while the rest of the plot has a 30-storey height limit.

While the maximum of 450 units allowed for the project is understood to be due to traffic considerations in the locale, this stipulation will have other implications.

JLL national director Ong Teck Hui said that as a consequence, the average unit size in the project will be 1,067 sq ft. “This will mitigate aggressive attempts in developing too many small units in order to achieve a high per square foot price,” he added.

Property consultants polled by The Business Times generally expect the site to garner keen interest due to the rare appearance of private housing sites in Singapore’s prime districts in state land tenders. The site is expected to fetch eight to 16 bids.

However, R’ST Research director Ong Kah Seng predicts only four to seven bids – citing the project’s sizeable development cost, notwithstanding developers’ continued strong appetite when it comes to restocking their land bank.

Forecasts for the winning bid generally converged around the S$930-1,020 per square foot per plot ratio (psf ppr) band. However, Mr Ong of JLL was more bullish; he expects the top bid to come in at between S$1,000 psf ppr and S$1,200 psf ppr.

“While the absolute land price would be high and pricey end-products more difficult to market, the lack of new development opportunities as well as an improved mood in the market will probably result in keen competition for this site,” he said.

Desmond Sim, the Singapore and South-east Asia head of CBRE Research, expects participation from the big boys at the tender. “Mid-sized players may form joint ventures to spread out the development risk; the total development cost for this project will be quite hefty, possibly around S$700 million.”

Mr Ong of R’ST expects the winning bidder to sell units in the future project on the site at an average price of S$1,800-1,950 psf, assuming the project is launched in the first half of next year.

SLP International executive director Nicholas Mak highlighted that there are very few new 99-year leasehold residential developments in the area. “As a result, it is quite possible that the new condo project on this site will be launched within the next two years at prices that are near to the transacted prices of freehold condos in the vicinity.”

The tender for the site, which is being conducted by the Urban Redevelopment Authority, closes on June 28.

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