Only 4 bids for exec condo site in Punggol

Published September 24, 2010
By FELDA CHAY


IN what may be a sign that the recent cooling measures have hit home, an executive condominium (EC) site in Punggol drew just four bids at the close of the state tender yesterday.


The highest offer for the 99-year leasehold site was $136.2 million, made by China's Qingdao Corp. This translates to $237 per square foot per plot ratio (psf ppr). The site has a gross floor area of 574,578 sq ft.

The price is the lowest among top bids for EC sites this year, said Credo Real Estate executive director of research and consultancy Ong Teck Hui. The plot sitting between Punggol Drive and Punggol East also drew the lowest number of bids for such sites so far this year, Mr Ong said.

This is a reflection of 'increasingly selective demand for EC sites as developers take into account more EC sites coming onstream', added Mr Ong.

CBRE Research executive director Li Hiaw Ho said the number of bids was 'quite modest' but 'expected for a location lacking in amenities and further away from Punggol Central'.

He said the $136.2 million bid translates to a break-even cost above $500 psf. Units in this new EC project will possibly sell around $600 psf, said Mr Li, adding that in the resale market, units in Park Green, The Rivervale and The Florida were sold at $550-$650 psf in June-August.

In June, NTUC ChoiceHomes and Chip Eng Seng Corp jointly put forth a $223.7 million bid for an EC site between Punggol Field and Punggol Road. At $308 psf ppf, this was 30 per cent higher than Qingdao's bid. Chip Eng Seng and ChoiceHomes also made a $119.9 million bid for the Punggol Drive/Punggol East site.

The difference between the top bids for the two Punggol EC sites could also mean that government measures are taking effect, said Nicholas Mak, executive director of SLP International Property Consultants

'This could also lead to more price competition among developers in 2011. Whether this will lead to lower home prices in 2011 will depend on whether the investment climate and economic conditions then are worse than today's climate and conditions.'

Qingdao's bid was just 2.2 per cent higher than the second highest bid of $133.2 million. The lowest of the four bids was $103.4 million

Source: http://www.businesstimes.com.sg