SINGAPORE — The tender for the plot of land on Jiak Kim Street, where the popular Zouk nightclub used to be, has been awarded to property developer FCL Residences for about S$955 million.

The Urban Redevelopment Authority said on Friday (Dec 8) that the company submitted the highest bid after the plot was released for sale by public tender in October. The 99-year leasehold site, which had a minimum bid price of almost S$690 million, is to be redeveloped into a residential property that has commercial units on the first floor.

Zouk, which made a name for itself during the 25 years it was there, relocated to Clarke Quay in December last year. Its lease had expired in 2012 and the authorities had given the dance club a few extensions before it finally had to move.

In releasing the results on Friday, the URA also announced that another land parcel to be redeveloped is the residential plot at Fourth Avenue in the Bukit Timah prime district. Allgreen Properties Limited also made the highest bid of about $552 million for this 99-year leasehold site, which was put up for sale last month.

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The tenders for both sites closed on Dec 5, and it is the first time in three years that the URA closed state land tenders for more than one site — or a batched tender — on the same day. The last time it did batched tenders was in 2014, when the property market was buoyant. Analysts had suggested that the revived practice was aimed at cooling the recent aggressive price bids for state land sites.

Commenting on the latest sales, Mr Donald Han, veteran property consultant and managing director for Hospitality Strategies Asia Pacific, said that the prices are still considered high. If not for the same closing date of the tenders, they could have been higher.

“Developers’ hunger... remains unabated despite the Government ringing alarm bells on rapidly rising land prices. Take note that the private collective sales at Royalville and Crystal Tower (both in the Bukit Timah district) were sold a few days before this tender,” he said.

However, to Mr Alan Cheong, senior director of research and consultancy at property firm Savills Singapore, it looked as if the developers were “more conservative than expected” in bid prices.

He said: “We had expected Jiak Kim Street to be closer to around S$1,900 psf per plot ratio, but it was at around S$1,700… For the Fourth Avenue site, we estimated close to S$1,700 psf per plot ratio, but it came to about S$1,500.”

In an earlier report by real-estate services firm Cushman & Wakefield, it was found that in the first five months of this year, developers paid an average of 29 per cent more for residential plots over comparable sites sold in the past five years.

Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants, said: “Clearly developers would not want to pay high for a site if they can help it, but in the current market where they are more developers than sites available, you need to secure a site if you are still interested in being a developer in Singapore... it is either participate or pack your bags and leave the industry. And if you participate… you participate to win it, not hand in a token bid.”

He noted that Jiak Kim Street is “a rare central site in an established and fairly exclusive neighbourhood”, and from a developer’s point of view, it is worth taking a risk on it.

As for the Fourth Avenue plot, Mr Tan noted that while its location is good, the odd shape of the site is “not ideal at all in terms of efficiency unless you have a creative team to handle it well”.

“For both sites, the easier part is to win them. The harder part is making money from the projects at these land prices,” he said.