Following the launch of GuocoLand’s Midtown Modern project, DBS Group Research says the development is “potentially one of Guocoland’s best-selling projects during launch weekend in recent times”.

In a research note dated March 22, DBS analysts Derek Tan, Rachel Tan, and the DBS Singapore research team noted more than 60% in sales was recorded at launch weekend. In comparison, GuocoLand’s other projects, with the exception of Martin Modern (with current sales of 92%), have current take-up rates of 18% - 28% respectively.

DBS says that the project, which comprises 558 units, saw good demand across the 1-bedroom  to 3-bedroom units while a majority of units sold were the 1-bedroom and 2-bedroom units with selected stacks fully sold out.

SEE:Guocoland earnings for 1H21 drop 69% to $22.9 mil on higher tax expense and lower revenue

“We understand that Singaporean families (upgraders, first property buyers) formed majority of the buyers,” the analysts say. They estimate that the average pricing of the project ranges between $2,650 – $2,700 per square foot," the analysts say.

The analysts believe that buyers are attracted to the project’s surrounding amenities, with a variety of food and beverage options, and Bugis Junction Mall a short walk away. In addition, the project is directly linked to Bugis MRT Station (along the Downtown East-West lines).

The project is a joint venture (JV) between GuocoLand (60%) and Hong Leong Holdings (40%), with the JV awarded the Tan Quee Lan site for $800.1 million through a government land sales tender back in Oct 2019. 

DBS is estimating a gross margin of up around 12% - 17% for the project, which the team views as “very decent” given the current climate. Total project costs are estimated close to $1.15 billion, implying break-even of around $2,300 – $2,350 per square foot.

Tiong Seng Holdings is understood to have been awarded the construction contract for the project for $227.5 million.

For more stories about where the money flows, click here for our Capital section 

"The strong sales at launch weekend is a good start and hopefully kick-starts a steady momentum for the project," the analysts say.

As at 3.01pm, shares in GuocoLand are 1 cent or 0.62% higher at $1.62.