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  • Tender for 2 two GLS sites at One-North closed with bid prices at more than 20% above the land price for the recently launched One-North Eden
  • Breakeven price is close to the lower end of current selling price
  • Bids were competitive with 10 bidders, tight winning margin of 1-2% 
  • Expect residential property sector to stay buoyant but government tightening measures remain a risk
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What’s New

10 bidders for tender at two sites at One-North, tight winning margins.  After the surprisingly subdued bid for the Marina View site, we saw exuberance in GLS bids for two land sites at One-North – Slim Barracks Rise A & B. The tender closed with 10 bidders competing for the site with a tight winning margin of 1.3% and 2.4% for land site A and B respectively. 

EL Development won land site A, which is slightly closer to the MRT station, with a winning bid of S$320m or S$1,245psf per plot ratio (ppr) while Gao Xiuhua (reported to be one of the owners of Kingsford Development) bagged land site B with a bid price of S$162.4m / S$1,210psf ppr.

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Strong showing at One-North Eden probably boosted sentiment for the site. 

Interest in suburban condominium sites have been robust year to date (YTD), probably boosted by an emerging hybrid work trend (i.e. “WFH”). The overall quantum for a unit is more “affordable” to households, although new pricing trends will likely push that envelope. For the Slim Barracks sites, the location within One North Precinct is possibly a draw given the increasing cluster of workers expected to be working within the area (i.e. SEA limited is expanding its presence in One North, into Rochester Commons) while Ho Bee is also building a new mixed-use development nearby to attract firms in the Bio-Tech industry. . 

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Winning bid prices more than 20% above the land cost for recently launched One-North Eden. One-North Eden condominium homeowners are immediate winners! The winning land price was more than 20% above the cost of One-North Eden’s land site which was awarded in 3Q2019 for S$1,001psf ppr. 

One-North Eden is located just opposite the Slim Barracks Rise land sites. Its recent launch in April 2021 caught everyone’s attention when it was reported that 85% of its units were sold during the first weekend of its virtual launch, a scene we have not seen or heard since the last property upcycle in 2017 / 2018. The units were launched at S$1,800psf to S$2,250psf. Small units were the most popular during the launch and were sold out by 10am. Foreigners and PRs made up c.20% of the buyers.  

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Estimated breakeven price is close to the lower end of the selling price. Based on the land prices, we estimate breakeven prices could be approximately S$1,800psf to S$1900psf, close to the lower end of the selling price of One-North Eden. The estimated launch prices could be above S$2,000psf.  

Key observations from the bids:

Majority of the large developers were either less aggressive or stayed out of this land tender. 

More intense competition for land site A, the bigger site and located closer to the MRT station. 

Interesting bidders included two JV consortiums comprising i) Far East Organisation, Ho Bee, Soilbuild and United Engineers; ii) Lian Soon, OKP Land, Hwa Seng Builder. 

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“The flour is as expensive as the bread” – déjà vu once again?  Does the phrase “the flour is as expensive as the bread” sound familiar? Is this déjà vu once again? It appears that we are creeping very quickly back to the last property upcycle in 2017/2018, before the authorities imposed property tightening measures. During the last property upcycle, we saw land bids that were easily priced at breakeven prices equivalent to current residential selling prices or even higher. 

We believe residential property market will remain buoyant and further “heating” up of the market would raise the risk of government intervention eventually.