reporter2
12-01-12, 16:05
http://www.businesstimes.com.sg/sub/news/story/0,4574,473272-1326311940,00.html?
Published January 11, 2012
Condo plot draws lower top bid as caution prevails
Bartley site tender gets five bids, down from eight for nearby plot earlier
By KALPANA RASHIWALA
(SINGAPORE) The latest tender results confirm a softening in land prices as developers remain cautious after the additional buyer's stamp duty kicked in last month. The tender for a 99-year-leasehold private condo plot near Bartley MRT Station has drawn a top bid 20.2 per cent lower than what a diagonally opposite site sold for about 10 months ago. The latest tender drew five bids, down from eight in the earlier one.
The same bidder - a Hong Leong Holdings, City Developments and TID consortium - offered the highest price for both sites.
'This shows even an incumbent player going in to protect its turf has to be very realistic. It reflects the air of caution in the market,' said SLP International managing director Peter Ow.
The consortium is getting ready to launch its project on the earlier site, Bartley Residences. Word on the street is that the average price for the 702-unit condo may be about $1,200 per square foot (psf). The development will have one to four-bedroom units.
Market watchers said yesterday that had Hong Leong not bid for the latest plot at Mount Vernon Road, it would have faced the risk of the price for Bartley Residences being undercut by a competitor.
Instead, by emerging as the top bidder at yesterday's tender, Hong Leong will be able to average down its breakeven cost and 'can manage its sales better', as a seasoned agent put it. 'They don't have to be forced into a very competitive situation when setting the price for The Bartley Residences,' he added.
Property consultants' estimates of Hong Leong's breakeven cost for the Mount Vernon Road site range from $880 to $1,000 psf.
Hong Leong Holdings' head of sales and marketing Betsy Chng said if the consortium is awarded the Mount Vernon Road site, 'it will no doubt help strengthen Hong Leong's position in the area, including the group's upcoming launch of The Bartley Residences'.
The consortium's top bid yesterday, of about $388.1 million or $495.01 per square foot per plot ratio (psf ppr), was 20.2 per cent lower than the $620.61 psf ppr it paid for the Bartley Residences plot at a tender closing in late March last year. Both sites have 99-year-leasehold tenure.
Property consultants polled by BT yesterday assigned a 5-10 per per cent difference in value of the two sites based on location. Worsening sentiment would account for the remaining difference in price.
The Bartley Residences plot is deemed superior, being right next to the MRT station and surrounded by a landed-housing estate. The Mount Vernon Road plot is a little further away from the MRT station and in a more mixed sort of location - surrounded by Bartley Secondary School, SPCA and the Gurkha Cantonment.
The top bid at yesterday's tender was 7.6 per cent higher than the second highest bid of $460.19 psf ppr from a partnership between Frasers Centrepoint unit Opal Star and Lum Chang Building Contractors. IOI Properties' unit Multi Wealth (Singapore) emerged in third place, with a $446.41 psf ppr bid. Hongkong Land unit MCL offered $373.71 psf ppr. The lowest bid of $319.88 psf ppr was from Mezzo Development.
Credo Real Estate executive director Ong Teck Hui said many developers could have given yesterday's tender a miss due to higher market risks arising from a substantial investment, pointing to the $388.1 million top bid. 'In comparison, the typical absolute prices of most suburban sites at $100-200 million are more manageable.'
Market watchers expect the cautious bidding mood to prevail at upcoming state land tenders for condo plots - such as for a site in Clementi (tender closing tomorrow) and another plot at Kovan Road/Simon Road (tender closing on Jan 18). 'But response could vary, with greater participation and more optimistic pricing for the more attractive sites,' said Mr Ong.
Published January 11, 2012
Condo plot draws lower top bid as caution prevails
Bartley site tender gets five bids, down from eight for nearby plot earlier
By KALPANA RASHIWALA
(SINGAPORE) The latest tender results confirm a softening in land prices as developers remain cautious after the additional buyer's stamp duty kicked in last month. The tender for a 99-year-leasehold private condo plot near Bartley MRT Station has drawn a top bid 20.2 per cent lower than what a diagonally opposite site sold for about 10 months ago. The latest tender drew five bids, down from eight in the earlier one.
The same bidder - a Hong Leong Holdings, City Developments and TID consortium - offered the highest price for both sites.
'This shows even an incumbent player going in to protect its turf has to be very realistic. It reflects the air of caution in the market,' said SLP International managing director Peter Ow.
The consortium is getting ready to launch its project on the earlier site, Bartley Residences. Word on the street is that the average price for the 702-unit condo may be about $1,200 per square foot (psf). The development will have one to four-bedroom units.
Market watchers said yesterday that had Hong Leong not bid for the latest plot at Mount Vernon Road, it would have faced the risk of the price for Bartley Residences being undercut by a competitor.
Instead, by emerging as the top bidder at yesterday's tender, Hong Leong will be able to average down its breakeven cost and 'can manage its sales better', as a seasoned agent put it. 'They don't have to be forced into a very competitive situation when setting the price for The Bartley Residences,' he added.
Property consultants' estimates of Hong Leong's breakeven cost for the Mount Vernon Road site range from $880 to $1,000 psf.
Hong Leong Holdings' head of sales and marketing Betsy Chng said if the consortium is awarded the Mount Vernon Road site, 'it will no doubt help strengthen Hong Leong's position in the area, including the group's upcoming launch of The Bartley Residences'.
The consortium's top bid yesterday, of about $388.1 million or $495.01 per square foot per plot ratio (psf ppr), was 20.2 per cent lower than the $620.61 psf ppr it paid for the Bartley Residences plot at a tender closing in late March last year. Both sites have 99-year-leasehold tenure.
Property consultants polled by BT yesterday assigned a 5-10 per per cent difference in value of the two sites based on location. Worsening sentiment would account for the remaining difference in price.
The Bartley Residences plot is deemed superior, being right next to the MRT station and surrounded by a landed-housing estate. The Mount Vernon Road plot is a little further away from the MRT station and in a more mixed sort of location - surrounded by Bartley Secondary School, SPCA and the Gurkha Cantonment.
The top bid at yesterday's tender was 7.6 per cent higher than the second highest bid of $460.19 psf ppr from a partnership between Frasers Centrepoint unit Opal Star and Lum Chang Building Contractors. IOI Properties' unit Multi Wealth (Singapore) emerged in third place, with a $446.41 psf ppr bid. Hongkong Land unit MCL offered $373.71 psf ppr. The lowest bid of $319.88 psf ppr was from Mezzo Development.
Credo Real Estate executive director Ong Teck Hui said many developers could have given yesterday's tender a miss due to higher market risks arising from a substantial investment, pointing to the $388.1 million top bid. 'In comparison, the typical absolute prices of most suburban sites at $100-200 million are more manageable.'
Market watchers expect the cautious bidding mood to prevail at upcoming state land tenders for condo plots - such as for a site in Clementi (tender closing tomorrow) and another plot at Kovan Road/Simon Road (tender closing on Jan 18). 'But response could vary, with greater participation and more optimistic pricing for the more attractive sites,' said Mr Ong.