Qingjian Realty Joint Venture Tops Bids for Media Circle Site with S$395 Million or S$1,191 PSF ppr Offer
Media Circle is located in Rest of Central Region and can be estimated to have 355 units of residential housing with commercial units on first floor. The 99-year leasehold property is 10.632.1 sq m, and the maximum allowable gross floor area of 30.834 sq. m.
The Business Times surveyed most analysts and they found that Qingjian and Forsea Residence bid within the range of S$1,050 – S$1,250/sqft/ppr. But market observers had expected to be surprised by the level of interest. They were expecting up to 6 bids.
Bids submitted for Media Circle were significantly higher than that of the GLS’s other site, which was only offered on Thursday (Jan.18). The white Marina Gardens Crescent site was offered by a GuocoLand/Hong Leong Group Consortium for S$770.5M or S$984psfppr.
The tender results today show that in an uncertain marketplace marked by increasing costs and shrinking profitability margins, developers are more hesitant to purchase large plots. They prefer smaller ones as they can mitigate their risks. Developers can stay more agile and reduce risks by investing in smaller sites.
Risk aversion is a common trait amongst developers, due to the high interest rate climate, macroeconomic challenges and cooling measures.
In 2021 both Slim Barracks sites received 10 bids.
Qingjian’s joint venture’s offer of S$1,191/sf/ppr for the Media Circle property was closely followed by an S$385m (S$1,160/sf/ppr) joint bid from Intrepid Investments (Hong Leong Holdings), Garden Estates/Hong Realty, and TID Residential/Hong Leong Holdings/Mitsui Fudosan.
CEL Development (the third bidder) and Singhaiyi Property Development (the last bidder) jointly submitted a bid for S$321 millions, or S$967/sqft/ppr.
Breakeven cost for the latest project is estimated to be S$2,000/sqft. Analysts estimate that the average launch price will be S$2,300 – S$2,400. This would be slightly lower than Blossoms, By The Park’s due to its location away from the MRT.
The developers are confident in the demand for homes one-north.
Blossoms In The Park launched its first 275 units in April 2014, right after the latest increase of Additional Buyer’s stamp duty (ABSD). At a price of S$2,427/sqft, it sold 74.5 % or 205 out of them. So far, it has sold more than 85%.
It is possible that the proximity of Science Park and One-North will make this future development attractive to investors or those who rent out apartments in these employment centres.
Qingjian Realty and Forsea Residence were the top bidders in an auction for government land to be sold in One-North, securing a S$395,000,000 bid. This bid beat out those of two other groups.
The joint-venture’s bid, which is S$1,191 psf ppr and is within expectations is 4.4 % less than the S$1,246 psf ppr EL Development paid at Slim Barracks to build Blossoms By The park on a nearby site.
The Hill @ One North will be built on a plot purchased by Gao Xiuhua. Both condominium sites in Slim Barracks were sold by 2021.