Sinarmas Land and MCL Land submit highest bid of $1,223 psf ppr for Pine Grove Parcel B

The tender for the government land sale (GLS) site at Pine Grove (Parcel B) closed on Nov 7 with three bids. At the top of the list, the bid price of $692.388 million from the Sinarmas Land-MCL Land joint venture was 23.8% higher than the second-highest bid of $988 psf ppr. The winning bid of $1,223 psf ppr is 7.2% lower than the neighbouring Parcel A, which was bid at $1,318 psf ppr and developed into Pinetree Hill.

The government land sale (GLS) site at Pine Grove (Parcel B) saw a lukewarm response of three bids when the tender closed on Nov 7. Nevertheless, the highest bid of $692.388 million from the joint venture between Sinarmas Land and MCL Land was deemed the winner, with a bid price of $1,223 psf per plot ratio (psf ppr). The offer was 23.8% higher than the second-highest bid of $988 psf ppr and 7.2% lower than the neighbouring Parcel A which was bid at $1,318 psf ppr.

The 269,552 sq ft, 99-year leasehold site at Parcel B has a maximum gross floor area of 566,003 sq ft and can be developed into a new residential project with an estimated 565 units. The project will mark the first residential development of Sinarmas Land in Singapore, a Singapore-listed real estate developer and a subsidiary of Indonesia’s largest conglomerate under the Widjaya family, one of Indonesia’s richest. Partnering with MCL Land, a member of the Jardine Matheson Group, the two have developed residential projects in Singapore and Malaysia.

The 269,552 sq ft, 99-year leasehold site at Parcel B has a maximum gross floor area of 566,003 sq ft and can be developed into a new residential project with an estimated 565 units. SRI head of research and data analytics Mohan Sandrasegeran explained that the decreasing unsold inventory in the Rest of Central Region (RCR) segment likely motivated some developers to secure residential sites in the area, “recognising the current opportunity to replenish their land banks”.

PropNex head of research and content Wong Siew Ying estimated the future average selling price of the new condo at Parcel B to be around $2,300 to $2,400 psf. Comparing the response to that of Parcel A which drew five bids, Wong Siew Ying commented that the “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”.

OrangeTee & Tie’s Deputy CEO Justin Quek further explains 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”. Pinetree Hill has sold 152 units (29.23%) at an average price of $2,388 psf, based on caveats lodged.

JLL head of residential research and consultancy Chia Siew Chuin hypothesised that the lukewarm response could be due to the expectation of UOL and SingLand to defend the pricing of their Pinetree Hill development and bid for the site. Such speculation could have discouraged other potential bidders from participating.

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The bid price of $1,223 psf ppr for Pine Grove Parcel B is also viewed as the lowest of the three sites that closed for tender on the same day, the other two being at Toa Payoh Lorong 1 at a highest bid of $1,360 psf ppr and Clementi Avenue 1 at a top bid of $1,250 psf ppr.

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There may also 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. Collectively, the Pine Grove GLS development will bring new homes into the area to meet the current housing demand.