The government land sale (GLS) tender for Middle Road and Sims Drive closed on March 28. There were five bids for the site at Sims Drive. The highest bid of $383.5 million ($732 psf per plot ratio) came from a 60:40 joint venture between Hong Leong Holdings' Intrepid Investments and City Developments Ltd, both members of Hong Leong Group Singapore. (See Table).
The 99-year leasehold site has an area of 174,648 sq ft and could be developed into a new residential project of 570 units. However, the joint venture will explore a residential development with several 17- or 18-storey blocks comprising about 560 units.
BIDS FOR SIMS DRIVE GLS SITE AT THE CLOSE OF THE TENDER
According to a Hong Leong Group spokesman, some of the attributes of the site include its connectivity – by the Kallang-Paya Lebar Expressway and the Pan Island Expressway, a short 15-minute drive to the Central Business District and Orchard Road Shopping Belt and a short travelling distance to Paya Lebar MRT Interchange Station and Paya Lebar Central, located just one stop from the Aljunied MRT station.
The site’s proximity to popular schools like Geylang Methodist School, Canossa Catholic Primary School, Cedar Primary School and Kong Hwa Primary School also makes the location attractive to young families, says the spokesman.
GuocoLand submitted the second highest bid of $655 psf ppr – 12% below the top bid, and even lower than the price it had submitted for the 1,024-unit Sims Urban Oasis site of $688 psf ppr in April 2014.
Given the site’s location in the city fringe and proximity to the Aljunied MRT station, Tricia Song, Colliers International head of research for Singapore, considers the underwhelming response – with just five bids -- “a surprise”. She attributes the subdued bid prices to the fact that the site is subjected to a larger minimum average unit size of 85 sq m. “Developers may also be assuming some buffer for the five-year ABSD [additional buyer’s stamp duty] time line, given its relatively larger plot size.”
Colliers estimates the selling price to be around $1,400 psf, after factoring the potentially larger units. The top bid is the lowest for a private residential land site on a psf ppr price basis since the Chong Kuo Road site near Mandai was sold for $681 psf ppr in Feb 2018.