A Land parcel in Margaret Drive that is big enough for 275 homes has been triggered for sale after a developer committed to bid at least S$185.76 million for it.
This is a Reserve List site under the government land sales (GLS) programme that can be released for sale only when the minimum price committed by a developer is acceptable to the government.
Based on the maximum gross floor area (GFA) of 22,195 square metres, this minimum price translates to S$777.54 per square foot per plot ratio (psf ppr).
The Urban Redevelopment Authority (URA) said on Thursday that it had accepted the application to put up the site for sale by public tender, which will be launched in about one to two weeks.
The tender period for the 0.48 hectare land parcel will be about four weeks.
Property consultants expect to see strong interest from developers given the site’s location and its palatable size. But their projections vary widely from five bids to 13 bids, with the winning bid likely to be in the region of S$800-912 psf ppr based on BT’s poll.
The 99-year leasehold site is nestled within an established residential enclave near the Commonwealth MRT station.
It is close to the Ayer Rajah Expressway, with nearby retail and dining options at the Dempsey Cluster, Queensway Shopping Centre, Ikea Alexandra and Alexandra Central.
There are also public amenities and schools in close proximity.
Lee Nai Jia, head of research for South-east Asia at Edmund Tie & Company, noted that the Commonwealth area is popular, given that it is a few stops to the CBD and is also near the Buona Vista area, which is a strong rental catchment area. New home prices in Commonwealth now range from S$1,400 to S$1,900 psf.
“Looking at the technical conditions of the tender, the proposed site faces several restrictions as they have to check for noise level from the neighbouring churches,” he said.
“Additionally, the site is close to MRT track and there needs to be a minimum 35m setback (from front wall). The developer may have less room to manoeuvre in terms of design. The bidder who wins is also likely to incorporate cycling amenities as they get GFA exemptions for the cycling facilities.”
SLP International executive director Nicholas Mak noted that the site was among the more attractive ones in the GLS Reserve List due to its location near the popular East-West MRT line and the plot’s relatively small and manageable size.
By comparing the trigger bid pricing of S$777.54 psf ppr for this site with the land price of S$871 psf ppr that Hao Yuan Investment paid last year for a 1.05ha parcel in Queenstown where it is launching Queens Peak, the trigger bid is “high but not ridiculously high”, Mr Mak said.
“This developer that triggered this tender may be using the same tactics as the developer who triggered the tender of the Central Boulevard white site, which is to trigger the tender at a fairly high price to discourage other developers to bid.”
R’ST Research director Ong Kah Seng noted that developers are generally running low in land inventory, and are thirsty to replenish landbank, in part to demonstrate that they have longer-term corporate growth strategies as land development is their bread and butter activity.