Bullish bids for Sembawang landed plots

Published October 29, 2010


Bullish bids for Sembawang landed plots
Most winning offers for the 99-year leasehold sites range from $500-$600 psf


By UMA SHANKARI


A GOVERNMENT land auction of 14 landed housing plots in Sembawang drew fierce bidding and bullish top offers as developers demonstrated their confidence in the landed housing market.


Most of the winning bids for the 99-year leasehold sites fell within the range of $500-$600 per square foot (psf), more than double the price that adjacent sites went for in two previous rounds of land auctions held in October 2007 and April 2008.

Yesterday, 11 out of the 14 sites that went under the hammer sold for more than $500 psf, with two sites even selling for $620 psf and $640 psf each. The sites sold yesterday were offered as phase three of Sembawang Greenvale at Sembawang Road and Wak Hassan Drive.

By contrast, data compiled for BT by Savills Singapore showed that in the last two rounds of public auctions, 22 out of the 23 sites offered under phases one and two of Sembawang Greenvale sold for $150-$300 psf. The remaining site was sold for $327 psf.

The Urban Redevelopment Authority (URA) also said there were 97 registered bidders yesterday, compared to just 16 at the last auction in April 2008.

Nicholas Mak, executive director of SLP International Property Consultants, noted that since April 2008, the average price of landed properties has increased by some 25 per cent while the average price of non-landed houses rose by only about one-tenth of that amount. And in the past one and a half years, the demand for landed houses had also increased strongly. 'The pent-up demand coupled with the limited supply contributed to the strong bidding in today's auction,' Mr Mak said.

The new envelop control development guideline for landed housing, which allows developers greater flexibility in the design and development of projects - and possibly some cost savings as well - could have also attracted more interest to the sites, he added.

All of the sites that went under the hammer yesterday were hotly contested with each plot drawing 50 bids on average. One site even drew 159 bids.

A large number of would-be bidders walked out of the packed auditorium at URA Centre after the first two sites were sold, citing the high prices. But most developers were good natured and often applauded the winning offers.

JBE Holdings, which won five of the 14 sites on offer, was one of the most competitive bidders. The company, which is owned by Christina Sui Fong Fong, has built Luxe Ville at Pasir Panjang Road, The Luxe at Handy Road and terrace houses in Sembawang.

Other successful bidders included Fragrance Group. The listed property group won two sites, including the most expensive - it paid $26.15 million for a 40,860 sq ft plot on which a potential 20 landed homes can be built.

Analysts expect prices of landed homes to climb more than that of non-landed housing next year on the back of limited supply. Noted one market watcher: 'We can be sure that prices in that part of Sembawang, at least, will climb after today's bids.' Presently, 99-year leasehold landed homes near Sembawang Greenvale are selling for around $700-$900 psf.

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