And the winning bid goes to Sim Lian for $970 million. Making million-dollar bids in the land sales market is certainly no child’s play, especially as the temperature in the collective sale market continues to rise.
$970 million biggest collective sale since 2007
The former HUDC Tampines Court just went for sale last month, and the deal has already been made. This is following 2 previously failed attempts. It may seem like 2017 is a good year. At $970 million, this latest collective sale is the largest since the $1.34 billion deal for Farrer Court in 2007.
The 702,164 sq ft Tampines Court on Tampines Street 11 has the potential to yield up to 2,600 units. While it may be a coup for Sim Lian to have won the bid, the sheer size of the plot could mean more pressure. Sim Lian will have 5 years to develop and sell all the units. Otherwise, they may have to pay the additional buyer’s stamp duty on the land price.
Will higher land prices translate to higher home prices?
From the sale, each home owner will receive between $1.71 million and $1.75 million. The price offered works out to be $676 psf ppr . Taking into consideration the $539 million for the premiums such as land-intensification and enhancement, the break-even price will be between $1,050 psf and $1,150 psf. Property analysts are expecting more home owners to follow suit with en bloc offers but are beginning to question the impending prices of new homes in the near future.