Well-located sites still reeling in developer interest
Despite flagging property sales, land parcels in optimal locations continue to draw in record high bids.
Colliers International offered up the recent tender results for Boon Lay Way (Jurong Gateway) as a prime example of how a prime spot will draw in the buyers.
"The tender for the condominium site at Boon Lay Way (Jurong Gateway) was a hotly and closely contested one with 12 bidders. The second to the sixth highest bids were all within 10% of the top bid at $369.39 million or $705.10 per sq ft per plot ratio," Colliers said.
"The top bid of $705.10 per sq ft per plot ratio is the second highest unit land price achieved for a private non-landed residential site in 2012 after the $880.74 achieved by the 96,423-sq ft site located at Jervois Road in February 2012," it added.
"The response by developers shows emphatically that a well-located site surrounded by amenities will still bring in much interest. Among the 12 bids, there are some signs that developers are divided on the immediate prospects of the residential market as the variation between the top bid and lowest bid is some 47%," said Colliers.
Boon Lay Way is well-situated around a wealth of retail, transport and business sites, notes Colliers.
"When completed, the residents of this condominium could enjoy a wide-spread of retail offerings from the recently completed Jcube and the upcoming Westgate and Jem lifestyle malls. The project is three minutes’ walk from Jurong East MRT Station and it is also in close proximity to the Ng Teng Fong General Hospital, which would be completed by the time the condominium is ready. Professionals working at the International Business Park would also be attracted to the location of this project. Overall, this site at Boon Lay Way (Jurong Gateway) will be right in the centre of Jurong Lake District’s development," it said.
Colliers added that given the winning bid and a land cost at $705.10 per sq ft ppr, the breakeven cost is likely to be in the region of $1,200 per sq ft.