Keppel Land and Wing Tai Land have teamed up to place the top bid of S$446.3 million ($327 million) on a prime residential site in the Serangoon Garden neighbourhood of Singapore, where the developers intend to build over 600 homes.
A joint venture between Singapore’s Keppel and the local affiliate of Hong Kong’s Wing Tai bested 16 other bids for the 99-year leasehold plot, exceeding the next highest offer by 6.6 percent, according to public records.
The Keppel-Wing Tai offer puts them in pole position for the 1.7-hectare parcel at Serangoon North Ave 1, and comes amid a flurry of new project activity as developers gain confidence in a residential market recovery.
Developer Bids Anticipate a Rebound
“We are confident that this new development will see positive demand as there have been few new condominiums launched in recent times in the popular Serangoon Garden area,” commented Keppel Land CEO Ang Wee Gee in a joint announcement by the partners.
The Keppel and Wing Tai bid for the site equates to S$964.80 ($706) per square foot of buildable space, with the second-highest bid coming from Frasers Centrepoint’s FCL Residences.
One-third of the bidders made “bullish” offers of over S$860 ($632) per square foot in the auction, pointing to confidence on the part of some investors that the city’s years-long residential slump has finally bottomed out. The new development could fetch prices ranging from S$1,500 ($1,098) to more than S$1,600 ($1,171) per square foot, according to analysts cited by The Straits Times.
Located in a mature residential neighbourhood in northeastern Singapore, the site was put up for sale by Singapore’s Urban Redevelopment Authority (URA) on May 30. The project is a five-minute drive from the Serangoon MRT station, about a half-hour journey from the downtown core.
Singapore’s URA has yet to evaluate the bids and award the tender for the site.
Singapore Residential Market Brought the Heat in July
Confidence in the market was boosted in the same week, when the privatised 244-unit Serangoon Ville estate also located at Serangoon North Avenue 1, was sold to a consortium led by Oxley Holdings for S$499 million ($365 million), well above the expected price when the property was put on sale last month.
In the previous week, all 531 units of the nearby Hundred Palms Residences, a government-subsidised project at Yio Chu Kang Road, were sold out within seven hours, in another sign that the market may be rallying.
Home prices are still falling in Singapore after sliding more than 10 percent from their peak in the third quarter of 2013, but developers are paying record prices for land in the face of shrinking unsold housing inventory and a tight land supply pipeline.