_Tender Closing at Northumberland Road
The tender for the Government Land Sales (GLS) site at Northumberland Road closed with ten bids, after a period of some six months since the last GLS tender at the end of October 2020. Given the rather long period in between tenders, developers were hungry to replenish their land banks. The top bid of almost $446 million or $1,129 psf per-plot-ratio (ppr) is 5.7% above the second highest bid of about $422 million or $1,069 psf ppr, and 74.2% higher than the lowest bid of $256 million.
The top bid comes in above expectations, as the unsold stock of private residential units was 21,602 as at Q1 2021, dwindling down from a high of 36,839 units in Q1 2019, according to Urban Redevelopment Authority (URA) statistics. At the same time, government land sales are few and far between, with collective sales practically negligible in the pandemic year of 2020. These factors could possibly combine to create a compression point where the shortage of development land could lead to competition heating up among developers to secure available land parcels from the GLS lists.
The most recent GLS site in the vicinity was the tender award of the plot at Perumal Road for $1,001 psf ppr to Low Keng Huat (Singapore) Limited in January 2017, where Uptown@Farrer is currently being developed.
Based on the top bid of $1,129 psf ppr, the breakeven cost could be between $1,800 and $1,900 psf. As such the likely selling price for the residential units here when launch ready could start from $2,100 psf to $2,200 psf. When completed, this site would benefit from the convenience of Farrer MRT station, and the shopping options of City Square Mall and Mustafa Centre. Additionally, this project will also be walking distance to Connexion, an integrated medical centre and hotel development.
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Photo Credit to URA