Published December 8, 2010
Sim Lian ahead in tight race for Punggol site
Top bid of $363m, or $406 psf ppr, is just 0.4% higher than nearest rival's
By KALPANA RASHIWALA
IN one of the tightest races for a site at a state tender, a joint venture between Sim Lian Land and Sim Lian Development edged out Qingdao Construction by just 0.4 per cent to emerge as the highest bidder for a 99-year leasehold private housing plot near Punggol MRT Station.
The site, which can be developed into a condo with about 810 units, includes Matilda House, the only remaining historic bungalow in Punggol New Town.
Sim Lian plans to restore Matilda House, which is gazetted as a conservation building, for use as a clubhouse in the proposed condo.
Sim Lian bid $363 million or $406.32 per square foot per plot ratio (psf ppr), inclusive of Matilda House's gross floor area. Qingdao Construction (Singapore) offered $361.7 million or $404.86 psf ppr.
The tender attracted seven bids. The lowest bid, from Allgreen Properties, was $288.76 psf ppr.
Credo Real Estate executive director Ong Teck Hui observed that the $406 psf ppr top bid for yesterday's tender is significantly above winning bids of $320-345 psf ppr for 99-year private housing sites offered at recent state tenders.
'This is due to the Punggol site's superior attributes, including proximity to an MRT station, and not necessarily indicative of higher bidding trends,' Mr Ong added.
In fact in late October when the Punggol site was launched, Mr Ong had predicted top bids of around $400-450 psf ppr for it. Hence, yesterday's top bid was at the lower end of that range.
'If it had not been for the August 30 property cooling measures coupled with the substantial Government Land Sales Programme for H1 2011 announced recently, the top bid at today's tender would have been even higher,' he said.
Agreeing, Sim Lian Group executive director Diana Kuik said: 'Developers are becoming cautiously optimistic even for sites that are well located near MRT stations.'
The biggest risk factor for a developer for the Punggol plot is the project's substantial size. 'However, this is mitigated by the site's proximity to an MRT station. Punggol is becoming a key feature of the north-east region boasting waterfront living,' Ms Kuik said.
As well, a commercial/ residential development on a plot next to Punggol MRT Station that was launched more recently will help make Punggol an even more exciting New Town, Ms Kuik added.
Sim Lian plans to pump in about $5 million to restore Matilda House. The group's proposed 16-storey condo on the 2.75 hectare site tendered yesterday will have about 800-odd units comprising two to four-bedroom apartments as well as penthouses. But the group will finetune its plans and is not ruling out having some one-bedders.
'We expect to launch the project by Q4 2011,' Ms Kuik said.
CBRE Research executive director Li Hiaw Ho estimates Sim Lian's breakeven cost at about $750 psf.
'A new project on the site may be able to fetch around $800 psf on average when it is ready for launch,' he said.
'One attraction about a new development on the latest plot in Punggol is Matilda House, which will enhance the lifestyle of the future residents with a piece of history of old Punggol,' Mr Li added.
Others who bid at yesterday's tender include Hong Leong Group's Intrepid Investments ($359 psf ppr), Keppel Land Realty ($357 psf ppr), a tie-up between Frasers Centrepoint, Far East Organization and Japan's Sekisui House ($332 psf ppr) and Ho Lee Group unit Khai Wah Development.
SLP International Property Consultants' executive director Nicholas Mak said the 0.4 per cent spread between the top two bids at yesterday's tender is the smallest for a 99-year private condo site offered at a state tender since 2000
Source: www.businesstimes.com.sg
