Local Builder Sim Lian Tops Tender for Singapore Residential Site with $255M Bid

Sim Lian Group placed the highest bid for a residential plot near Singapore’s Upper Bukit Timah area, topping a competitive field in a government tender for the suburban site on Tuesday.

Privately-held Sim Lian Land and Sim Lian Development offered S$347 million ($255 million) to edge aside six other bids for the 15,663 square metre (168,595 square foot) site at Dairy Farm Walk, within five minutes’ walk of Bukit Timah Nature Reserve, the city-state’s Urban Redevelopment Authority (URA) announced.

“The top bids are just a notch below our expectations and suggest that the property market remains optimistic but is not overly exuberant,” said Lam Chern Woon, head of research and consulting at Edmund Tie. “The cooling measures have anchored market expectations towards a sustainable trajectory, a win-win for all stakeholders.

Lam called the auction “hotly contested” as the top bidder managed to beat the second-highest offer of S$343.4 million by just one percent, narrowly defeating a joint venture between Yanlord Land’s United Engineers unit and Soilbuild Group Holdings. The tight race for the luxury housing plot came as Singapore housing sales have proven resilient in the wake of new market cooling measures introduced in December.

Suburban Bliss

Sim Lian’s latest prize allows it to build up to 32,893 square metres of gross floor area on the 99-year leasehold site. Located across the road from the German European School Singapore, the plot is also around 1 kilometre (.62 miles ) from the Bukit Timah Expressway. The Hillview MRT station is also within a 15 minute walk, and the 75-hectare (2.5-acre) Dairy Farm Nature Park is one block away.

“Developers remain confident in the suburban residential market which is likely to see sustained demand from first-time buyers and home upgraders,” Lam said. “Retirees downgrading their homes and desiring a relaxed and lush lifestyle are likely to be drawn to the area too.”

The developer is paying the equivalent of S$980 per square feet per plot ratio for the project, and Lam estimated that homes in the Dairy Farm site could fetch around S$1,780 per square foot. Still, the analyst warned that the builder should remain sensitive to market conditions when pricing the project, as nearby developments such as United Engineers’ Dairy Farm Residences – a 460-unit condo complex — still has 10 percent of its homes available with that failure to sell out potentially undermining buyer enthusiasm.

Projected to yield 385 units, the upcoming development’s launch prices could reach up to S$1,900 per square foot according to 99.co research head Ying Khuan Pow. At that rate, the project would be setting an all-time high for District 23, where the Dairy Farm Walk site is located, while exceeding the current median prices of new homes and resale condos in District 23, which currently stand at S$1,692 and S$1,063 per square foot, respectively.

“The locational attributes of the Dairy Farm Walk GLS site are alluring as it is located in a quiet enclave that is close to Bukit Timah Nature Reserve, and some units especially the south-facing stacks will be able to enjoy unblocked views of greenery,” Pow said.

Suburban Sites In Demand

A few minutes drive further west is another residential plot up for tender that has also seen strong reception with nine developers bidding for the leasehold executive condo site at Bukit Batok West Avenue 8, based on a separate release from the Housing and Development Board (HDB).

On the same day that the URA closed the tender for the Dairy Farm Walk site, Singapore’s Housing and Development Board (HDB) announced the bids for a hybrid public-private executive condo site on Bukit Batok West Avenue 8 near the planned Tengah town area in the western part of the island.

The tender for the 99-year leasehold site drew nine bids with a joint venture between Qingjian Realty and Santarli Construction placing the highest offer at S$266 million. The 12,449 square metre site is approved for construction of up to a gross floor area of 37,348 square metres and is expected to yield around 375 homes.

At the stated compensation, the partners are set to pay the equivalent of S$661.67 per square foot of finished housing for the site.

The same two companies acquired an executive condo site in Tampines Street 62 in northeastern Singapore during July last year for S$422 million.

Edmund Tie’s Lam estimated that prices for homes in the Bukit Batok project will likely average at S$1,300 per square foot, while executive condos in the area currently sell for an average of S$1,200 per square foot.

Developers Unfazed

The bids this week came despite government efforts to dampen homebuyer enthusiasm and put a lid on home prices.

“Although there were fresh cooling measures introduced in December 2021, we believe OCR (outside central region) home sales will remain resilient as it is underpinned by genuine demand from owner-occupiers and first-time home buyers, who are not as affected by the new property curbs,” said Wong Siew Ying, research and content head af PropNex Realty. “Hence, developers are more confident in acquiring OCR sites.”

99.co’s Pow concurred, saying condo prices in suburban areas or those outside the Central Region have always been affordable and will likely continue this way due to high demand from first-time homebuyers and owner-occupiers.

“In the medium to long term, the outlook for this area and OCR in general remains positive as we expect the suburban areas to be less impacted by the cooling measures,” he added.