Joint venture Qingjian Realty tops Media Circle bids with S$395m or S$1,191 per square foot ppr.

Qingjian Realty and Forsea Residence won a government tender to sell a residential plot at one-north for S$395m, beating out two other groups.

While within expectations, the joint venture’s offer of S$1,191 psf ppr is 4.4 percent lower than the S$1,246 psf ppr paid by EL Development for a site nearby at Slim Barracks, where it is building Blossoms by The Park.

The price is also 1.6 percent lower than what Gao Xiuhua (one of the owners of Kingsford Development) paid for the plot that will house the upcoming The Hill at One North. Both condo sites were located in Slim Barracks, and sold in 2021.

The Media Circle bids were higher than the only GLS bid that was submitted on Thursday (18 Jan). One offer was made for the prime Marina Gardens Crescent site by a GuocoLand-Hong Leong Group consortium. It came in at S$770.5m or S$984 per square foot ppr.

The results of today’s tender show that developers are hesitant towards large plots and more inclined to smaller plots in order to reduce risks on a market marked by uncertainty, escalating prices and shrinking margins. The smaller sites are more cost-effective and allow developers to be agile, reduce costs, and minimise risks.

The high interest rates, the macroeconomic downturn and the cooling measures have led to a constant risk-aversion by developers.

Media Circle, located in the Rest of Central Region can produce 355 residential units with commercial units at the first floor. The 99-year-leasehold site, located near the One-North office clusters, is 10,632.1 square meters in size with a maximum gross floor area (GFA), of 30,834 square meters.

The Business Times polled analysts who expected Qingjian and Forsea Residence to bid between S$1,050 and S$1,250 per square foot. Market watchers expected more interest, up to six bids.

Both Slim Barracks sites attracted 10 bids in 2021.

Qingjian’s joint venture bid for Media Circle, which was S$1,191 per square foot per person, was followed closely by a S$385-million (S$1,160 per square foot) offer from a joint partnership between Intrepid Investments, Garden Estates, and TID Residential, a joint venture of Hong Leong Holdings, Mitsui Fudosan, and Hong Realty.

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CEL Development and Singhaiyi Property Development placed the last of the three bids, with a joint bid of S$321,000,000, or S$967 per square foot, per person.

Breakeven costs for the new project could be around S$2,000 per sq. ft. Analysts expect that the launch price could range between S$2,300 to S$2,400 per square foot on average. This is slightly less than Blossoms by The Park because of its distance from MRT.

Developers’ confidence in the demand for housing in One-North is reflected in the highest bid for Media Circle.

Blossoms by the Park, despite being launched just after the most recent hike in Additional Buyer Stamp Duty (ABSD), last April sold 74.5 percent or 205 of its 275 unit at a median of S$2,427 per sqf. More than 85% of the units have been sold.

The future development could be attractive to people who work at Science Park or One-North, as well as investors seeking to rent out units.

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