Sinarmas Land and MCL Land submit highest bid of $1,223 psf ppr for Pine Grove Parcel B
By Cecilia Chow
/ EdgeProp Singapore |
Pine Grove Parcel B sits between Pine Grove Parcel A (the upcoming 520-unit Pinetree Hill) and the Pine Grove privatised HUDC estate that is attempting an en bloc sale (Source: EdgeProp Landlens)
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The tender for the government land sale (GLS) site at Pine Grove (Parcel B) closed on Nov 7 with three bids. The highest bid of $692.388 million came from a joint venture between Sinarmas Land and MCL Land.
Sinarmas Land is a Singapore-listed real estate developer and a subsidiary of Indonesia's largest conglomerate, Sinar Mas Group, controlled by the Widjaya family, one of Indonesia's richest. If the joint venture wins the site, it will mark Sinarmas Land's first residential development in Singapore.
MCL Land is a member of the Jardine Matheson Group under Hongkong Land Holdings and has developed residential projects in Singapore and Malaysia. Incidentally, MCL Land and Chinese developer CSC Land submitted the highest of six bids for the Clementi Avenue 1 site at the close of the tender on Nov 7.
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The bid price of $692.388 million submitted by Sinarmas Land-MCL Land translates to $1,223 psf per plot ratio (psf ppr), which is 23.8% higher than the second-highest bid of $988 psf ppr submitted by the joint venture between UOL Group and Singapore Land (SingLand) Group.
However, the highest bid of $1,223 psf ppr for Parcel B is 7.2% lower than the $1,318 psf ppr submitted by UOL and SingLand for the neighbouring Parcel A.
Parcel A also drew five bids at the close of its tender last year, compared to three for Parcel B. "The comparatively less enthusiastic response for this site tender is not unexpected, given that there is competing supply right next door at Pine Grove (Parcel A), which is being developed as 520-unit Pinetree Hill," says Wong Siew Ying, PropNex head of research and content.
UOL-SingLand launched Pinetree Hill in mid-July. To date, 152 units (29.23%) sold at an average price of $2,388 psf, based on caveats lodged.
Preview crowd at Pinetree Hill, where 152 units have been sold to date at an average price of $2,388 psf. (Photo: UOL Group)
JLL head of residential research and consultancy, Chia Siew Chuin, reckons the lukewarm response could be due to market expectations that UOL and SingLand may aim to defend the pricing of its Pinetree Hill development and bid for the site. "That could also have discouraged other potential bidders from participating," she observes.
Justin Quek, deputy CEO of OrangeTee & Tie, reasons that "there may be a sufficient time gap between the launch of Pinetree Hill and the future project at Parcel B to ensure enough demand to absorb the additional supply of new homes in the area".
The 269,552 sq ft, 99-year leasehold site at Parcel B has a maximum gross floor area of 566,003 sq ft. It can be developed into a new residential project with 565 units. PropNex's Wong estimates the future average selling price of the new condo at Parcel B to be around $2,300 to $2,400 psf.
While there may be potential collective sales in the area, such as the neighbouring Pine Grove privatised HUDC estate, which was launched for collective sale in September with a guide price of $1.95 billion, developers may still prefer GLS sites, as seen from the multiple bids received for Parcel B, notes OrangeTee's Quek.
The highest bid of $1,223 psf ppr submitted for Pine Grove Parcel B is also the lowest of the three sites that closed for tender today, adds OrangeTee's Quek. The other two sites were at Toa Payoh Lorong 1, where the highest bid was $1,360 psf ppr and Clementi Avenue 1, with a top bid of $1,250 psf ppr.
According to SRI head of research and data analytics at SRI, Mohan Sandrasegeran, uncompleted and unsold residential units in the Rest of Central Region (RCR) totalled 4,470 units in 3Q2023. It is the lowest point since 4Q2021, when the unsold inventory hit 4,306 units.
"The notable decrease in the unsold inventory likely motivated some developers to secure residential sites within the RCR segment to bolster their land portfolios," says Sandrasegeran. "They recognise the current opportunity to replenish their land banks, given the depleting supply of unsold units in the RCR segment."
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