Singapore – As of December 2016, MCL Land has since emerged in a brutal competition by being the best of the best in beating 13 other major customers for a precious residential land site along Margaret Drive in Singapore. The highest price bid of $238 million came from MCL Land (Regency), a wholly-owned subsidiary under the Hongkong Land Holdings. It translates to a reasonable $997 per square foot per plot ratio according to the black paper.
Based on the maximum allowable gross floor area (GFA) of this land parcel which could yield about three hundred homes in future, it is only about eight percent more than the second highest bidder Allgreen Properties at $220 million.
Such intense and aggressive bids for a city fringe leasehold land shows the extreme hunger of local and foreign major property players. Not only are they super hungry in their own land bank inventory, but it is also an indication that all of them are reading the future market outlook positively.
Betting big on a real possible upswing in real estate prices, simply by timing the sales period of their new project when it is ready for them to put in the market for sale. Said JLB International, a director for research and development Mr Mohd Sohai.
This rare and exclusive land parcel came from the Reserve list site, under our state land sales program that was called for a tender procedure soon after a prominent builder submitted their application and promised to bid at a price level which satisfies the government. It was eventually made known to be at least $186 million for it in November, a baseline for all interested parties.
According to market watchers, based on MCL’s best price bid, the breakeven price point range for this site is expected to be between $1,450 to $1,550 per square foot when it is ready for sale.
The strong and solid involvement from 14 major customers, and a slightly higher than anticipated best bid of $997 per square foot per plot ratio doesn’t come as unexpected to market observers. Given the nice attributes of this premium site and the relatively palatable land size made it so much easier to digest with the smaller price tag since market outlook seems bearish at that very moment. Mr Mohd Sohai said.
The result of this positive tender exercise could also encourage the state land department in releasing more land parcels while planning for their subsequent years program. In view of the higher bidding price war interest coming from major players in the industry market, that will be one of the main source of income for the country when the land is scarce and precious.
Among the big boys in this industry, CB research mind for Singapore and Asia Pacific, Mr Alan Smith had observed the insatiable needs of major builders from this hotly contested tender exercise. Some of those participated have not even successfully secured any lands in their inventory over the past 18 months.