Qingjian Realty joint-venture tops bids with S$395m offer

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 what EL Development paid at Slim Barracks for a site nearby 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 tend to avoid large plots and prefer smaller ones in order to reduce risks on a market characterized by uncertainty, rising costs and decreasing profit margins.

The capital expenditure on smaller sites is more manageable, which allows developers to be agile, reduce costs, and minimize risks.

It could be due to the constant risk aversion of developers, given the macroeconomic conditions and cooling measures.

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 bids of Qingjian and Forsea Residence fell in the range that The Business Times polled most analysts to expect. Market watchers expected more bids, possibly up to six.

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.

Find out more about The Chuan Park showflat

CEL Development and Singhaiyi Property Development placed the last of three bids, with a combined 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 One-North housing demand is reflected in the highest bidder for Media Circle.

Blossoms by the Park, which was launched in April after the most recent increase in Additional Buyer Stamp Duty (ABSD), sold 74.5 percent or 205 of its 275 apartments at a median of S$2,427 per square foot.

More than 85% of the total 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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