Qingjian Realty’s joint venture wins Media Circle property with a bid of S$395,000,000 or S$1,191/sf/ppr
Qingjian joint-venture’s offer, S$1,191/sq ft/ppr, for the Media Circle location was followed by S$385 (S$1,160/sq ft/ppr), from a consortium between Intrepid Investments and Hong Leong Holdings.
CEL Development’s and Singhaiyi Property Development’s joint bid was S$321million, or S$967psfpr.
The cost to break even for this latest project may be as low as S$2,000 per square foot. Analysts anticipate that the price of launch could be in the range of S$2,300-2,400 psf. This will be lower than Blossoms In The Park due its distance to MRT.
Qingjian Realty and Forsea Residence came out on top in the bids for a government-run land auction to sell a residential parcel in one north with a S$395 Million bid. Two other groups were also in contention.
The joint venture bid of S$1,191 psf ppr was within expectations but is 4.4 % below the S$1,246 psf ppr EL Development offered for a similar site in Slim Barracks where it will build Blossoms At The Park.
The Hill@One North is expected to be constructed on a plot of land that was paid for by Gao Xiuhua. Both condominiums sites are in Slim Barracks. These were sold between 2021 and 2022.
Despite the current high interest rates environment, the macroeconomic climate and the cooling measure, developers continue to avoid taking risks.
Media Circle can provide 355 residential homes, with commercial space on the top floor. The 99 year leasehold site in the Rest of Central Region is 10632.1 sqm with a maximum GFA (gross floor area) of 30834 sqm.
The Business Times’ polled analysts expected Qingjian and Forsea Residence’s bid to fall between S$1,050 and S$1,250 psf. However, market watchers were expecting to see more bids – possibly up to 6. Both Slim Barracks Sites attracted ten bids each in 2021. Developers are confident that demand will be high for homes in one north.
Blossoms, launched last April after the latest hike of the Additional Buyers’ Stamp Duty (ABSD), sold 74.5 percent or 205 unit of its 275 at a S$2,427 median price psf. It has already sold more that 85 per cent.
It could be that proximity to Science Park, One North and other employment hubs will attract those in the area or investors who are looking to rent out their units.
The Media Circle site bids came in higher than any other GLS tender on Thursday, January 18. One bid was received for the Marina Gardens Crescent, a prime white site. This offer came from a GuocoLand Hong Leong Group joint venture at S$770.5million or S$984psfppr.
The results of the current tender show developers’ reluctance to build large sites. Instead, they prefer smaller plots because it is easier to manage risks in a volatile market with escalating cost and decreasing profit margins. As smaller sites have a manageable capital expenditure, developers can remain agile, minimise their costs and minimize risks.