Published December 3, 2010
CDL's bid for EC site tops closest rival's by 15.5%
By KALPANA RASHIWALA
CITY Developments Ltd's top bid for an executive condo (EC) plot at Segar Road in the Bukit Panjang area at a state tender yesterday was 15.5 per cent higher than the next highest bid, from EL Development.
The gap is wider than those of previous EC tenders this year, which have ranged from 0.6 per cent to 10 per cent, noted Cushman & Wakefield senior manager for Asia-Pacific research Ong Kah Seng.
At yesterday's tender, CDL unit Grand Isle Holdings bid $181.99 million or $270.51 per square foot per plot ratio, while EL Development offered $234.11 psf ppr. The tender drew five bids, the lowest at nearly $168 psf ppr from Sim Lian Land.
CDL's relatively high winning margin is probably due to the fact that it has tasted success in the location, say some market watchers. Earlier this year, it launched Tree House, a 99-year leasehold private condo, which sold out like hot cakes.
Also, the latest EC plot is a short walk from Segar LRT Station and three LRT stations away from the Bukit Panjang MRT station of the proposed Downtown Line 2, which is scheduled to be completed in 2015, said CB Richard Ellis executive director (residential) Joseph Tan.
ECs are a hybrid of public and private housing with ownership and resale restrictions in the first 10 years. After that period, they are fully privatised. EC projects, which boast private condo facilities, are an attractive housing option for buyers who meet the eligibility criteria, including a monthly household income ceiling of $10,000.
The Segar Road EC site offered at yesterday's tender by the Housing & Development Board can potentially generate about 570 EC units, according to the Government Land Sales Programme for second half 2010.
A CDL spokesman said: 'In the event that we are awarded this well-positioned EC site, we plan to build a 15-17 storey project. We see great potential in this growing district and we're confident that there'll be strong demand from young families and upgraders for an EC project on this site.'
This will be CDL's fourth EC project - after Esparis, Florida and Nuovo.
CBRE's Mr Tan estimates that CDL's breakeven cost for the latest EC site could be around $570-590 psf. 'There will be a market for this new EC project if it's priced 20-25 per cent lower than Tree House, which was completely sold at an average price of $830 psf in Q2 2010,' he added.
Nearby, units at Chestervale - a completed EC that is now fully privatised - were sold at $500-540 psf in the resale market in July-October this year, he added.
Cushman's Mr Ong said that the five bids for the latest EC tender reflect 'moderate interest from developers, given that a few EC projects are expected to be launched next year'. 'In addition, the government will release another three EC sites through the confirmed list in first-half 2011, signalling that there will be ample supply in this segment.'
The remaining bidders at yesterday's tender were a tie-up between Frasers Centrepoint and Lum Chang Building Contractors which bid about $191 psf ppr, and Pinnacle Realty, whose shareholders include Fission Holdings, with about $178 psf ppr.
Source; www.businesstimes.com.sg
