mr funny
10-07-11, 06:19
http://www.straitstimes.com/Money/Story/STIStory_688342.html
Jul 8, 2011
Subdued interest in Punggol EC site
3 developers submit conservative bids as mood turns cautious
By Esther Teo, Property Reporter
PUNGGOL EC SITES (http://www.straitstimes.com/STI/STIMEDIA/pdf/20110707/ST_IMAGES_P1BLURBS08-05C.pdf)
SUBDUED INTEREST (http://www.straitstimes.com/STI/STIMEDIA/pdf/20110707/ST_IMAGES_P1BLURBS08-O2A.pdf)
DEVELOPERS have swopped their bullishness for caution as evident in the latest tender for an executive condo (EC) site in Punggol.
The tender received both subdued interest and conservative bids.
A joint venture between Frasers Centrepoint and Keong Hong Construction lodged the top bid of $219.5 million in a three-way tussle for the site at the junction of Punggol Way and Punggol Field.
The bid works out to $270 per sq ft (psf) per plot ratio (ppr) - the lowest unit price for an EC site for the year.
This is also 12 per cent lower than the top bid of $308 psf ppr for a nearby EC site sold in June last year where Prive - which is about 98 per cent sold - now sits.
Chip Eng Seng's unit CEL Development came in just a shade lower at $218.5 million or $269 psf ppr, while EL Development was third with a $177.1 million bid or $218 psf ppr.
Experts said developers are pricing in a buffer should the market soften and are treading cautiously due to policy uncertainties in the public housing sector.
The healthy upcoming supply of EC projects and mass-market homes in Punggol might also have weighed on their minds, they added.
Mr Nicholas Mak, head of research at SLP International, said this is the first time in at least the last 18 months where a subsequent tender in the vicinity has come in at a lower price than the previous site.
'The bullishness that developers have displayed last year and early this year, with every subsequent tender attracting higher prices, is giving way to more caution... Developers might be expecting prices to remain fairly flat in the next year,' he added.
Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, noted that the cautious mood in recent condo tenders is filtering through to EC sites.
'With several ECs under active marketing and more to be launched, as well as new EC sites in the government land sales programme in the second half of this year, the potential supply has become more significant and would have deterred keen participation and optimistic bidding in the tender,' he added.
SLP's Mr Mak noted that four EC sites in estates such as Tampines and Choa Chu Kang, with about 2,500 units in total, have yet to be launched.
Colliers International's director of research and advisory, Ms Chia Siew Chuin, said the Punggol project is likely to break even at $540 psf and might sell for an average of $690 psf, in line with newer EC developments in the area.
'This cautious bidding and the resulting lower land cost would provide the developer a buffer should the market soften going forward,' she added.
CB Richard Ellis noted that Prive transacted at an average price of $700 psf, while RiverParc EC at the junction of Punggol Drive and Punggol East has an average price of $650 psf.
Frasers Centrepoint said it plans to build an estimated 700 units over ten 17-storey blocks on the site.
The site is located near the Punggol MRT interchange, where Frasers is developing a waterfront residential and commercial project.
[email protected]
Jul 8, 2011
Subdued interest in Punggol EC site
3 developers submit conservative bids as mood turns cautious
By Esther Teo, Property Reporter
PUNGGOL EC SITES (http://www.straitstimes.com/STI/STIMEDIA/pdf/20110707/ST_IMAGES_P1BLURBS08-05C.pdf)
SUBDUED INTEREST (http://www.straitstimes.com/STI/STIMEDIA/pdf/20110707/ST_IMAGES_P1BLURBS08-O2A.pdf)
DEVELOPERS have swopped their bullishness for caution as evident in the latest tender for an executive condo (EC) site in Punggol.
The tender received both subdued interest and conservative bids.
A joint venture between Frasers Centrepoint and Keong Hong Construction lodged the top bid of $219.5 million in a three-way tussle for the site at the junction of Punggol Way and Punggol Field.
The bid works out to $270 per sq ft (psf) per plot ratio (ppr) - the lowest unit price for an EC site for the year.
This is also 12 per cent lower than the top bid of $308 psf ppr for a nearby EC site sold in June last year where Prive - which is about 98 per cent sold - now sits.
Chip Eng Seng's unit CEL Development came in just a shade lower at $218.5 million or $269 psf ppr, while EL Development was third with a $177.1 million bid or $218 psf ppr.
Experts said developers are pricing in a buffer should the market soften and are treading cautiously due to policy uncertainties in the public housing sector.
The healthy upcoming supply of EC projects and mass-market homes in Punggol might also have weighed on their minds, they added.
Mr Nicholas Mak, head of research at SLP International, said this is the first time in at least the last 18 months where a subsequent tender in the vicinity has come in at a lower price than the previous site.
'The bullishness that developers have displayed last year and early this year, with every subsequent tender attracting higher prices, is giving way to more caution... Developers might be expecting prices to remain fairly flat in the next year,' he added.
Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, noted that the cautious mood in recent condo tenders is filtering through to EC sites.
'With several ECs under active marketing and more to be launched, as well as new EC sites in the government land sales programme in the second half of this year, the potential supply has become more significant and would have deterred keen participation and optimistic bidding in the tender,' he added.
SLP's Mr Mak noted that four EC sites in estates such as Tampines and Choa Chu Kang, with about 2,500 units in total, have yet to be launched.
Colliers International's director of research and advisory, Ms Chia Siew Chuin, said the Punggol project is likely to break even at $540 psf and might sell for an average of $690 psf, in line with newer EC developments in the area.
'This cautious bidding and the resulting lower land cost would provide the developer a buffer should the market soften going forward,' she added.
CB Richard Ellis noted that Prive transacted at an average price of $700 psf, while RiverParc EC at the junction of Punggol Drive and Punggol East has an average price of $650 psf.
Frasers Centrepoint said it plans to build an estimated 700 units over ten 17-storey blocks on the site.
The site is located near the Punggol MRT interchange, where Frasers is developing a waterfront residential and commercial project.
[email protected]