SINGAPORE (EDGEPROP) - The one-north Gateway site received nine bids at the close of the tender on September 5. The top bid of $155.7 million was submitted by TID Residential, a unit of TID Pte Ltd (a joint venture between Japanese developer Mitsui Fudosan and Hong Leong Holdings). The bid price by TID translates to a land cost of $1,001 psf per plot ratio (psf ppr).
The nine bids received for the one-north Gateway site came as no surprise as it’s the smallest site on the Confirmed List, with the potential to yield about 165 units. “It’s a palatable development quantum which appeals to more developers,” says Tricia Song, Colliers International head of research for Singapore. The risk of not being able to sell out the units in the project within the five-year timeline is also reduced, she adds.
Bidders for GLS site at one-north Gateway
Song reckons the breakeven price for the new project to be in the ballpark of $1,500 to $1,550 psf. Assuming a minimum average unit size of 85 sq m for the new project, the developer could be looking at selling prices north of $1,600 psf, she estimates.
The adjacent project, one-north Residences, was completed in 2009, and prices of units in the 900 to 1,000 sq ft range, have changed hands at prices of around $1,500 psf, year-to-date in 2019, according to Colliers.
In fact, the last residential site to be launched for sale at one-north was the site next door, for the development of one-north Residences, the first condominium project in one-north. That was in 2005, says Desmond Sim, CBRE head of research for Southeast Asia. “The site is located near the one-north MRT station, which presents great accessibility options.”
The last residential site that was sold in one-north was in 2005, the site of one-north Residences next door (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The healthy interest for the site at one-north also reflects “pent-up demand”, says CBRE’s Sim. “The bidders were probably encouraged by the growing tenant pool as well as the limited options available in the private residential market.” However, the site is also located on top of MRT tracks which may impact the construction process and costs, which led to an experienced developer bidding for the site, notes Sim.
Christine Li, Cushman & Wakefield (C&W) head of research for Singapore and Southeast Asia sees the new development at one-north Gateway further enhancing the work-live-play concept at one-north. She expects to see “strong demand for units in the project” owing to the relative scarcity of housing stock in the one-north precinct, she adds.
In addition, Grab and Razer are currently constructing their headquarters at one-north, with Grab’s facility expected to house up to 3,000 employees, according to C&W. “This could be a source of potential demand as affluent tech workers who work long hours might prefer to live nearby to shorten their commute,” reasons Li.