Pasir Ris EC site draws whopping 11 bids

[reporter2]

http://www.businesstimes.com.sg/sub/news/story/0,4574,460053-1318449540,00.html?

Published October 12, 2011

Pasir Ris EC site draws whopping 11 bids

First tender closing since hike in income ceiling for buyers

By KALPANA RASHIWALA


THE first tender closing for an executive condominium site following the higher income ceiling for EC buyers has drawn a whopping 11 bids.

This response at yesterday's state tender for a 99-year leasehold EC plot near Pasir Ris Park and beach was matched only by the plot in Compassvale Bow (now being developed into Esparina Residences) when its tender closed in March last year, after a six-year hiatus in sales of EC sites.

ECs are a hybrid of public and private housing with initial buyer eligibility and resale restrictions which are lifted 10 years after the completion of an EC project.

While developers were out in force at yesterday's tender for the site at Pasir Ris Drive 3/Pasir Ris Link, bidding was fairly measured, notes Credo Real Estate executive director Ong Teck Hui. He said that following the $2,000 increase in monthly household income ceiling to $12,000 for those buying ECs from developers, he was expecting the top bid for the Pasir Ris EC plot to come in at around $300 per square foot per plot ratio (psf ppr).

Instead, the highest bid yesterday was about $291.02 psf ppr, from a 70:30 tie-up between Ho Lee Group and Maxdin. The latter is a subsidiary of UE E&C Ltd, which in turn is part of the United Engineers group.

'We have plans for a . . . project with about 400 units of various sizes. The proposed project is expected to be launched towards late March next year. We're optimistic about the EC market in Singapore especially with the recent rise in income ceiling,' said a spokesman for UE E&C Ltd.

Credo's Mr Ong noted that the increase in income ceiling for EC buyers opens this housing category to a larger pool of buyers. 'It not only boosts demand for ECs but has included buyers with higher levels of affordability, which provides EC developers greater confidence in pricing and sales take-up.'

The last EC site to be sold prior to yesterday's tender was at Punggol Way. It drew just three bids at a tender in July; the top bid was $270 psf ppr.

Mr Ong estimates the breakeven cost for a new EC project on the latest plot in Pasir Ris at about $650 psf and the expected average selling price at above $700 psf.

The top bid at yesterday's tender was 2.8 per cent higher than the next highest offer of $283.02 psf ppr bid from Chip Eng Seng unit CEL Development. Kheng Leong subsidiary Peak Shines was in third place, at $271.26 psf ppr. Hangzhou Headway Real Estate Co, Ltd teamed up with locally incorporated L Gold Pte Ltd to bid $271.16 psf ppr. The lowest bid of $214.34 psf ppr was from Wee Hur Development.

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http://www.straitstimes.com/Money/Story/STIStory_722263.html

Pasir Ris EC site attracts 11 bidders

Raising of income ceiling may have prompted higher interest, but bids were fairly measured

Published on Oct 12, 2011

By Esther Teo, Property Reporter

http://www.straitstimes.com/STI/STIMEDIA/pdf/20111011/ST_IMAGES_ETEC.pdf

A RECENT policy shift that lifted the income ceiling for executive condominiums (ECs) has likely sparked a rush among developers for a Pasir Ris site.

The 99-year leasehold EC plot at the junction of Pasir Ris Drive 3 and Pasir Ris Link attracted 11 bidders, though the offers were not above expectations.

A joint bid by the Ho Lee Group and UE E&C unit Maxdin came in tops, with its offer of $291 per sq ft per plot ratio (psf ppr), or $122.2 million.

That was just 3 per cent more than Chip Eng Seng's bid of S$118.8 million or $283 psf ppr. Kheng Leong subsidiary Peak Shines was third, with a bid of $113.9 million - or $271 psf ppr.

The site of almost 200,000 sq ft can yield about 390 apartments, the Housing Board said.

Experts say that while interest was robust, the bids were fairly measured. The units are expected to break even at about $580 psf to $650 psf, with selling prices expected to be above $700 psf.

The top bid of $291 psf ppr was below the average of $298 psf ppr for the 12 EC sites tendered since March last year.

Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, said the 'overwhelming response' from 11 developers was in contrast to the usual handful of bidders at recent EC site tenders. 'But the strong interest is not unexpected, as this is the first EC tender closing after the EC income ceiling was raised to $12,000 in mid-August, opening this category of housing to a larger pool of buyers.

'The income ceiling revision not only strengthens demand for ECs, but also has included buyers with higher levels of affordability, which provides EC developers greater confidence in pricing and sales take-up.'

SLP International's research head Nicholas Mak said the strong showing at the nearby Belysa EC, which sold out in a month, could have contributed to the high number of bidders. 'Other than this site, there is no other supply of new EC projects in the Pasir Ris area in the immediate future.'

However, Colliers International's director of research and advisory Chia Siew Chuin noted that the top bid is about 11 per cent more than Belysa's $263 psf ppr, awarded in October last year.

A spokesman for UE E&C said the site will be developed into a waterfront estate, with about 400 units of various sizes. It is expected to be launched towards the end of the first quarter of next year.

'We are optimistic about the EC market in Singapore, especially with the recent rise in income ceiling,' he added.

Separately, the Urban Redevelopment Authority launched a 204,000 sq ft commercial and residential site at the junction of Jelebu and Petir roads yesterday. It can yield an estimated 310 homes.

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