A joint attempt by Fantasia Investment (Singapore) and Singhome (Mount Sophia) to acquire a rare prime 99-year leasehold residential site ended in narrow defeat when a consortium formed by Hoi Hup Realty, Sunway Developments and S.C. Wong Holdings toppled the duo with a marginally higher bid.

The latter submitted a bid of S$442.28 million, or S$1,157 per square foot per plot ratio (psf ppr), for the 255,865.662 sq ft plot of land. Fantasia and Singhome, however, lost out by a mere 0.1% with a bid of S$442 million.

Altogether there were nine bids when the tender process closed yesterday – after opening since 28 June 2013.

The number of bidders and bid amount squared with market watchers’ predictions of a winning bid between S$1,000 and S$1,300 psf ppr, and five to 15 bidders.

The stiff competition is hardly surprising given that this is the first site in District 9 to be sold since 2007 under the Government Land Sales (GLS) programme, and the last residential site in the core central region (CCR) to be launched for sale under the confirmed list of GLS 2013. Apart from the Mt Sophia site, the only other residential site in the CCR sold under the confirmed list this year is at Coronation Road / Victoria Park Road. The latter was sold to Athens Residential Development Pte Ltd, a unit of Capitaland, for S$366 million.

The Mt Sophia site can yield up to 500 homes and is believed will be the biggest residential development in Mt Sophia. It is regarded as a prime site due to its ideal location in the civic district and short walking distance to Dhoby Ghaut MRT Station and Plaza Singapura. It is also expected to have good rental potential with prestigious schools nearby like the Schools of the Arts and Singapore Management University.

However construction cost is expected to be high due to its terrain and design restriction. Experts expect break-even costs to be in the region of S$1,630 to S$1,800 psf, and selling price to be close to S$2,000 psf or even above.

While mortgage regulations have somewhat curbed escalating property prices, the strong competition for land suggests that home prices will remain high, property buyers should be financial savvy and choose a suitable home loan. Speak to a mortgage specialist for FREE professional advice.

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