SINGAPORE (June 2): Within one week, three en-bloc sales were closed with the latest being MCL Land putting a robust $765 million bid for Eunosville.

Together with the earlier en-bloc sales of Rio Casa and Goh & Goh Building, this brings the total en-bloc sales to four since the beginning of 2017.

Looking at the way the en-bloc sales and land bids are transacted, DBS lead analyst Rachel Tan says developers seem to be pricing in a price recovery in 2018 in their bids, implying the bullish sentiment towards land-banking good quality sites in Singapore.

This could imply upward pressure on prices in the medium term.

“We estimate that from these projects, we could potentially see 3,100 of new residential units, or 42% of total units from government land sales, coming from the above four land sites,” says lead analyst Rachel Tan in a Friday report.

MCL Land had just closed an en-bloc deal with another record offer price of $765 million or $909 psf ppr including the estimated differential premium, for Eunosville HDUC estate.

The breakeven price is estimated to be $1,400 psf which means that the launch price could be close to $1,600 psf. Eunosville sits on a site area of 35,000 sqm and GFA of 1 million sf.

Oxley-Lian Beng Venture put in a robust $575 million or $706 psf ppr bid for Rio Casa HUDC estate with a site area of 37 sqm and with GFA of 1.1 million sf.

The developer will have to pay an additional $208 million in differential premium in order to fully maximise the built-up potential and to reset the tenure to 99 years.

Tan expects the breakeven price to be close to $1,100 psf which implies a selling price of $1,300 psf vs transactions in the surrounding condominiums of $700-1,030 psf as of end 1Q17.

“Our ‘overweight’ stance for developers remain, with CityDev (CDL) and UOL being the key beneficiaries of a rise in prices given the existing unsold stock and potentially better margins for recently land-banked projects,” says Tan.

Shares of CDL and UOL are trading at $10.77 and $7.06 respectively.