CBRE Comments: Land Sales Tender - Stirling Road and Lorong 1 Realty Park

Desmond Sim, Head, CBRE Research, Singapore and South East Asia:
The past few tender bids have garnered a lot of interest and we expect similar levels of between 10 and 15 bids each for the two residential plots. Developers are bidding for the future. Shoring up their land banks is a top priority now given that as the unsold inventory is steadily reducing. The Stirling Road site is a prime plot located on elevated ground and developers will price in the views offered by the site. Smaller cap developers might be deterred by the quantum but this can very easily be overcome by partnering with a joint venture partner to spread development risk. The site will garner interest from local as well as foreign parties like SP Setia who won the bid for the recent tender of the Toh Tuck site.
The Lorong 1 Realty Park site is a landed plot and offers a different value proposition from the Stirling Road site. It is slated for landed low density housing, which is limited in supply. It being a fairly small site with 50 landed homes will attract small to mid cap developers. 99-year leasehold terrace houses in the neighbourhood are currently transacted in the resale market at $1.5 mil to $2.0 mil. The site could fetch $60mil to $70mil ($420-$480 psf on land area.)


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