Monday, 17 May 2021

CDL-MCL Land tie-up makes top bid of $445.9m for Farrer Park residential site

SINGAPORE – The first residential government land sales (GLS) tender for 2021 – a plum site in the Farrer Park area – closed on Tuesday (April 27) evening after attracting 10 bids and a robust bid price that showed developers’ hunger for land.

The 99-year leasehold parcel in Northumberland Road, near Little India – offered for sale by the Urban Redevelopment Authority under the GLS programme for the second half of 2020 – is the second GLS tender to close since the Covid-19 pandemic began.

City Developments (CDL) and joint venture partner MCL Land, through their wholly-owned units Maximus Residential SG and Maximus Commercial SG, emerged the top bidder at $445.9 million. This is only 5.7 per cent higher than the second highest bid of $421.9 million.

The top bid of $1,129 per sq ft per plot ratio (ppr) is at the upper end of analysts’ estimates. It is also higher than that of another GLS site in Perumal Road, where Uptown @ Farrer is being developed, which was awarded at $1,001 psf ppr in 2017.

CDL group chief executive Sherman Kwek said: “We are elated to be the top bidder and honoured to have our first collaboration with MCL Land.”

He added that the acquisition ensures that CDL maintains a healthy inventory level in Singapore.

MCL Land chief executive Tan Wee Hsien said: “We have full confidence in the long-term fundamentals of the Singapore residential market.”

A decision on the award of the tender will be made after the bids have been evaluated.

The site can be developed into a mixed-use project comprising 408 residential apartments of up to 23 storeys and commercial retail space – including an infant care and childcare centre – on the ground floor.

Bounded by Gloucester and Race Course roads, the site is near the Farrer Park MRT station, City Square Mall, Mustafa Centre and Connexion, an integrated medical centre and hotel development.

Analysts say the new project may be launched at between $1,900 and $2,100 psf.

Diminishing private housing supply in the city-fringe area and strong take-up in new launches could have sparked robust competition for the Northumberland Road site, said ERA Realty head of research and consultancy Nicholas Mak.

He added that this tender could set the tone for two other residential GLS tenders closing on May 25 – Ang Mo Kio Avenue 1 and the Tengah Garden Walk executive condominium site.

Huttons Asia director of research Lee Sze Teck believes the bid is “measured”.

“The URA non-landed property price index has increased 17.4 per cent from first quarter 2017 till first quarter 2021, much more than the increase in land price. This shows that developers are mindful of the potential risk of new cooling measures affecting demand,” he said.

He noted that the volume of uncompleted unsold stock at 21,602 units is “getting dangerously low and is just 6,517 units away from the previous low of 15,805 units in second quarter 2017”.

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