SPH recast as property play

SINGAPORE (June 15): Entities linked to Singapore Press Holdings Ltd (SPH) and Kajima Development Corp have placed the top bid at a state tender for a 99-year-leasehold mixed commercial and residential site in Bidadari Estate, Singapore.

They have offered S$1.13 billion (RM3.49 billion), which works out to S$1,181 per sq ft per plot ratio (psf ppr).

The 25,440 sq m land parcel, located next to Woodleigh Mass Rapid Transit station, is expected to yield 825 private homes and can have a commercial component of up to 15,000 sq m.

As part of the tender conditions, at least 6,000 sq m and 2,190 sq m must be set aside for a community club and a neighbourhood police centre, respectively.

Consultants say prices submitted by developers are significantly higher than market expectations. They were expecting S$800 to S$900 psf ppr or S$766 million to S$863 million.

Ten out of the 12 bids submitted are above the top range of prices (S$900 psf ppr) expected by consultants.

The second-highest bidder is a tie-up between Far East Civil Engineering Pte Ltd and Sekisui House, which offered about S$1.12 billion for the site.

Other bidders include GuocoLand Ltd, Kingsford, Sim Lian Group Ltd, Nanshan Group Singapore Co Pte Ltd, City Developments Ltd and Chip Eng Seng Corp Ltd.

This is the latest in a series of bullish land deals in Singapore’s residential market. With declining unsold inventories and bullish land bids by developers, Maybank Kim Eng believes a home-price rebound is imminent.

The brokerage is maintaining its positive view on property developers. Its top sector pick is UOL Group Ltd with a target price of S$9.05. — theedgemarkets.com.sg

For more stories, download TheEdgeProperty.com pullout here for free.