A RESIDENTIAL site in Tanah Merah has attracted a bullish top bid of $285.2 million in a closely fought 13-way tussle - in a sign developers are still hungry for well-located mass-market plots.

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A joint bid by Fragrance Group and World Class Land topped the table with a bid of $676 per sq ft (psf) per plot ratio (ppr). The 14,000 sq m site is set to boast an estimated 415 homes.

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The top bid was just 1.8 per cent more than CapitaLand unit Areca Investment's second- placed bid of $280.1 million - or $664 psf ppr.

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Other bidders vying for the 99-year leasehold site at Tanah Merah Kechil Road include Sing Holdings, Qingjian Realty, Far East Organization, Frasers Centrepoint and Trident Assets, which lodged the lowest bid of $202 million - or $479 psf ppr.

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Experts say that the strong tender response is largely due to the site's proximity to Tanah Merah MRT station and the expectation of very keen demand from buyers interested in this locality.

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Credo Real Estate executive director Ong Teck Hui said buyers showed strong interest when they flocked to Bedok Residences at its launch at the end of last year, resulting in a rapid take-up rate.

 

"Bedok Residences may have the added draw of its commercial amenities, but this site is just one train stop away, and with the right pricing, the project is likely to sell well," he added. Another possible plus factor is the site next door, which has a commercial zoning and is likely to have retail facilities should it be sold and developed. This would enhance the convenience of the site as well as others in the vicinity, Mr Ong said.

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ERA Realty key executive officer Eugene Lim noted that developers are "optimistic on the site and its potential".

Residential sites within walking distance of MRT stations have proven to be a formula for success, and usually sell out, he added. Mr Lim expects a breakeven price of just below $1,000 psf and an estimated selling price of $1,200 psf to $1,300 psf.

 

Ms Chia Siew Chuin, Colliers International's research and advisory director, pointed out that as the site is close to the predominantly landed residential area of Bedok Road, Simpang Bedok and Lucky Heights estate, there could be a sizeable portion of potential downgraders from these landed properties.

"There would also be a potential pool of upgraders to tap. Currently, a significant 14,003 households live in five-room and executive HDB flats in the Bedok Planning Area, according to the Population Census 2010," she added.

Ms Chia expects the breakeven cost to range from $1,000 psf to $1,100 psf, with selling prices at above $1,250 psf.

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However, Dennis Wee Group's senior manager of research and consultancy, Mr Lee Sze Teck, said that the bid was "bullish", as it was 25 per cent more than the previous site sold at Bedok South Avenue 3, even though market conditions have not changed significantly.

He expects the breakeven price to be between $1,050 psf and $1,100 psf, with selling prices possibly from $1,300 psf to $1,350 psf.

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From January to June this year, units at the nearby Optima@Tanah Merah were sold at a median price of $1,114 psf.