Top bids for Hougang site just 2.6% apart

Published November 10, 2010

Frasers Centrepoint- Far East-Sekisui bid leads in 4-horse race


By KALPANA RASHIWALA

THE more sober bidding mood continued at a state tender for a 99-year leasehold private condominium site at Upper Serangoon View in the Hougang area yesterday, as developers remained mindful of the sustained land supply being delivered by the state.


The top bid of $320.15 per square foot of potential gross floor area - from a tie-up of Frasers Centrepoint, Far East Organization and Japan's Sekisui House - was within market expectations and just 2.6 per cent above the second highest offer by a unit of Centurion Properties. It bid about $312 psf per plot ratio (psf ppr).

Yesterday's tender drew just four bids. A unit of CapitaLand offered $302 psf ppr, while a unit of City Developments bid at $278 psf ppr.

This is believed to be Osaka-based Sekisui House's first major Singapore real estate venture. The group is the largest home builder in Japan and prides itself on building environmentally-friendly houses.

In a joint statement, Frasers Centrepoint, Far East and Sekisui said: 'This is an attractive site as the development will enjoy water views (from the adjacent Sungei Serangoon) and the greenery from nearby Punggol Park. We are planning to build about 470 units (eight blocks of 17 storeys) on the site.'

Credo Real Estate executive director Ong Teck Hui described yesterday's tender result as consistent with the pattern for the previous four state tenders for 99-year leasehold private condo land where top bids have also come in below the $350 psf ppr mark.

'This pattern of bidding still reflects caution on the part of developers who are mindful of the continuity of sites coming on. There will be a Government Land Sales (GLS) tender closing every week till mid-December, and the first-half 2011 GLS Programme can be expected to throw up a wide selection of sites when it's announced,' he added.

The plot offered at yesterday's tender is slightly further away from Hougang Central and its amenities compared with a land parcel at Hougang Avenue 7 which was sold at a state tender in September. Sim Lian picked up that 99-year condo plot for about $340 psf ppr.

In May this year, MCL Land paid $456 psf ppr for a site at the corner of Hougang Avenue 2 and Yio Chu Kang Road that can be developed into a five-storey condo. That plot is next to a landed housing estate.

CBRE Research executive director Li Hiaw Ho estimates the top bid at yesterday's tender translates to a breakeven cost of about $650-680 psf. 'Units in this new project could possibly sell at an average price of about $800-850 psf.

In the resale market, units at Evergreen Park and Rio Vista (both nearby 99-year condos) were sold at $600-720 psf in July to September 2010,' he added.

Source: www.businesstimes.com.sg