A RESIDENTIAL site in Ang Mo Kio that attracted 12 developers drew a bumper offer of $550 million – a sign that the sky-high land prices seen late last year will continue.
Wheelock Properties lodged the top bid, which works out to $790 psf per plot ratio (ppr), for the nearly 1.85 ha site.
This easily topped the range of $560 to $650 psf ppr predicted by analysts, who had already ramped up their forecasts for the 99-year leasehold plot due to the area’s limited supply of condos.
Wheelock’s bid for a suburban, leasehold site is a departure for the developer, which is usually known for its upmarket freehold condominiums in prime districts.
It has rarely ventured into the suburbs, said DWG senior manager Lee Sze Teck, adding that almost all of Wheelock’s developments are freehold, with the exception of Parc Oasis in Jurong East.
He estimated the break- even price at between $1,250 and $1,300 psf for the site in Ang Mo Kio Avenue 2.
About 680 units can be built on the site, with selling prices from $1,350 to $1,600 psf, said analysts.
The $1,600 psf upper limit is because the project is likely to be priced lower than Centro Residences, next to Ang Mo Kio MRT, which sells for around that price, said ERA key executive officer Eugene Lim.
The Ang Mo Kio Avenue 2 site is near the future Mayflower MRT station, part of the new Thomson Line to be completed in 2021.
The $550 million bid from Wheelock’s Pinehill Investments was only 2.5 per cent above the $536.2 million lodged by CapitaLand unit Athens Residential Development.
ERA’s Mr Lim said the bid price was much higher than resale prices of around $570 psf at the development next to the site, Horizon Green.
The third highest bid was $518.4 million from Bayfront Land, a joint venture between Fragrance Group and World Class Land. Keppel Land unit Acresvale Investment was next, with $515 million. The lowest bid was from Plan Achieve, at $362 million or $520 psf ppr.
Mr Ong Teck Hui, Jones Lang LaSalle national director for research and consultancy, said the tender results suggest the new pricing norm for attractive suburban sites has risen to around $800 psf ppr.
Pointing to a $791 psf ppr top bid for a New Upper Changi Road site that closed last October, he said top bids for similar attractive suburban sites were in the $500 to $550 psf ppr range early last year.