Upper Serangoon DBSS site draws just 2 bids

Published December 1, 2010

Upper Serangoon DBSS site draws just 2 bids
LKH unit offers $155.2m, pipping Sim Lian's $113.3m


By UMA SHANKARI

A LAND parcel offered for sale under the Design, Build and Sell Scheme (DBSS) at Upper Serangoon Road received just two bids at the close of the government tender yesterday.


A unit of Low Keng Huat (Singapore) made the higher bid of $155.2 million. The price works out to $206 per square foot per plot ratio (psf ppr), which is within analyst expectations.

Low Keng Huat's offer was 37 per cent higher than the other bid, from Sim Lian Land. Sim Lian offered $113.3 million, or $150 psf ppr.

Eugene Lim, associate director of ERA Asia Pacific, said that based on the tender price, Low Keng Huat will be looking to sell the upcoming flats on the site at about $500-540 psf.

He added that this would make the upcoming DBSS flats significantly cheaper than new private homes in the locality.

New sites for private residential developments in the vicinity are now being sold for upwards of $300 psf ppr, he said.

ERA's data shows that four-room resale HDB flats in the area are selling for $400,000-420,000 while five-room resale flats are going for around $500,000-540,000.

Market watchers had expected the Upper Serangoon Road site to draw a small number of bids when it was launched in October. Interest in such sites might be muted given the recent property cooling measures and the expected economic slowdown, they said.

Ong Kah Seng, senior manager of Asia-Pacific research at Cushman & Wakefield, said when the site was launched that it would draw only 'modest' interest and estimated that the highest bid would probably come in at the $200-230 psf ppr range.

The 103-year leasehold site along Upper Serangoon Road is about 215,300 sq ft in size and has a maximum allowable gross floor area of 753,500 sq ft. It can accommodate an estimated 630 units.

Under the Housing Board's DBSS scheme, private developers will undertake the entire public housing development process, from tendering for the land to designing, building and selling the flats

Source; www.businesstimes.com.sg