MRT proximity dominated the Hillview Avenue tender result

Due to the site's location to the Downtown Line it defied market fears and drew in optimistic bids.

The Hillview Avenue tender closed with a total of seven bids, and a $243.2 million top offer from Kingsford Development.

Average selling prices for the development site, said Maybank Kim Eng, will hover in the $1,296 psf range with a price spike imminent after the nearby MRT station becomes operational.

Also, rentals are pegged at roughly $2.55 psf pm based on last quarter estimates for similar units in the area.

Here's more from Maybank Kim Eng:

The latest tender results for a condominium site at Hillview Avenue bear out the commonly-held belief that a development near any MRT line (in this case, the Downtown Line) is a boon in itself, if not a lift to the prices it can command when launched. Property cooling measures notwithstanding, the 99-year leasehold site attracted bullish offers from seven developers. Kingsford Development submitted the top bid of $243.2m, a comfortable 15.6% above the second-highest bid by Flamegold Pte Ltd. The breakeven for the land cost works out to just a 5% discount to that of The Hillier, a mixed-used project launched for sale at the beginning of the year.

We expect the average selling price for the proposed development on the Hillview site to be similar to The Hillier, whose median price currently is $1,296 psf. The New York-themed tower has sparked a quicker rise in price in the vicinity, with resale condos fetching above $900 psf in the past year or so. Island-wide, The Hillier and Watertown are the only two primary market launches that stood out for a 100% take-up rate of their launched units. In our view, the new land parcel will most likely attract the same strong take-up rate, and the selling price may see a further boost as the date to the launch of the MRT station draws closer. Rental for units in the area was around $2.55 psf pm at the end of the last quarter, according to our estimates. This works out to a respectable gross yield of 3.4%.

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