3.7 Hectare Singapore Project Receives Seven Bids

Singapore has closed a tender on one of the largest sites ever marketed by the government, with seven bids received for the commercial-residential property amid healthy sector interest and a spate of land sales.

The 3.73 hectare (9.19 acre) Sengkang Central site is located at the Buangkok MRT station in northern Singapore, about 37 minutes journey from the Raffles Place financial hub on the North-East Line. Maximum gross floor area for the development is set at 78,299 square metres (842,803 square feet), with at least 46,980 square metres required to be residential, and up to 700 housing units could be developed.

“The site presents strong potential to be the landmark of the Sengkang/Buangkok vicinity,” says Desmond Sim, Head, CBRE Research, Singapore and Southeast Asia. “We expect the selection process to be challenging and very comprehensive.”

The Urban Redevelopment Authority (URA) announced the close of the tender for the 99-year land lease on 21 June.

Half of Holland Road Bidders Take a Shot at Northern SG Site

The list of bidders suggests significant interest but also a degree of caution. Total numbers are down from an earlier tender for a prime site in the Holland Road shopping district, with the URA having received 15 bids for that 2.30-hectare commercial-residential site in March.

Half of the bidders for Sengkang Central participated in the Holland Road tender. A CapitaLand-City Developments (CDL) consortium and a Perennial Real Estate Holdings-Qingjian Realty consortium, both unsuccessful in the earlier contest, submitted envelopes for Sengkang Central.

The Far East Organization, winner of the Holland Road site, lodged two separate bids. Other participants in the Sengkang Central tender are: Wing Tai Holdings, which bid together with Keppel Land; Singapore Press Holdings, which teamed up with Japan’s Kajima Development; and MCC Land, the local branch of China’s MCC Group, which made a joint bid with Grantral Land.

The Far East Organisation has been especially active lately. The local developer not only acquired the Holland Road site in May for S$1.21 billion ($890 million), but the company also purchased a commercial-residential property at Bukit Timah the same month for S$1.2 billion.

Traditional Residential Area

Under Singapore’s government land tender process, the Sengkang Central tender utilises a two-envelope bidding process, with a concept envelope from each bidder to be opened first. The URA scores each proposal on the quality of design (weighted 40 percent), the quality of public space created (30 percent) and the track record of the bidder (30 percent). A second envelope is for the bid price.

The Buangkok area, located near Punggol Park and just west of Pasir Ris, is known as being traditional, quiet and residential. An integrated community is expected to rise at Sengkang Central with all necessary services and amenities on site, including shops and a hawker centre.

Land Sale Surge Continues in the City-State

In addition to the Bukit Timah and Holland Road sites won by the Far East Organisation, the URA made three other awards in May. A UOL-led consortium won a Silat Avenue residential property for S$1.035 billion as sole bidder, while a New World Development-led group purchased a residential property on Cuscaden Road for a record S$2,377 per square foot. FSKH Development acquired a 0.62 hectare residential site that month on Mattar Road for S$223 million.

The next tender from the URA is for a 19,648 square metre site on Dairy Farm Road. It is designated for residential development with commercial use permitted on the first storey. The deadline for submissions is 4 September.

After declining since the end of 2014, commercial property prices in Singapore are starting to rebound on renewed optimism and concern about the lack of available land for development.