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10-01-14, 12:03
http://www.straitstimes.com/archive/wednesday/premium/money/story/bullish-199m-bid-jurong-west-ec-site-20140108
Bullish $199m bid for Jurong West EC site
Top offer reflects pent-up demand for exec condos in area: Experts
Published on Jan 08, 2014
By Melissa Tan
AN EXECUTIVE condominium (EC) site in Jurong West fetched an unexpectedly bullish top bid yesterday in a closely fought 12-way tussle.
Consultants said the top offer of $198.9 million for the plot in Westwood Avenue reflected pent-up demand for ECs in the area and developers' hunger for land.
It came despite recent government measures that made it more difficult for people to buy EC units, which are a hybrid of public and private housing.
The top bid was lodged by a tie-up between Koh Brothers unit Changi Properties and Heeton Homes.
The price works out to $382 per sq ft (psf) per plot ratio (ppr) for the 186,052 sq ft land parcel, just above the high end of market expectations of between $285 psf ppr and $380 psf ppr.
The top offer narrowly edged out the second-highest bid of $380 psf ppr jointly lodged by City Developments unit Verwood Holdings and TID Residential.
The number of bids was also higher than the six to 10 that consultants had predicted.
CBRE research head Desmond Sim added that the "relatively palatable" total quantum likely boosted the number of bids.
The site is near amenities such as Gek Poh Shopping Centre, Pioneer Mall, Jurong West Stadium and Jurong West Public Library.
The bullish top bid came despite this plot being the first to go on sale since the Government put restrictions on the EC segment last month.
The Government tightened financing for EC purchases by capping mortgage payments at 30 per cent of monthly pay, and imposed a resale levy on certain EC buyers.
These new restrictions could have led to the huge gap between the top and bottom bidders at yesterday's tender, consultants said.
The lowest bid was $180 psf ppr lodged by Sim Lian.
The wide range of bids shows that developers are reading the EC market differently, said Jones Lang LaSalle Singapore research director Ong Teck Hui.
Alternatively, SLP International research head Nicholas Mak said that some of the lower bidders could have been "bottom-fishing" for a bargain in hopes that the new rules would reduce the future prices of ECs.
Colliers International research head Chia Siew Chuin said the developer that wins the site could make up for bidding high by building units that are smaller than the average size to keep them affordable.
Consultants expect the break-even cost to be from $650 psf to $750 psf, and the selling price to be around $800 psf to $820 psf.
The site is estimated to yield 485 homes and is on a 99-year lease.
[email protected]
Bullish $199m bid for Jurong West EC site
Top offer reflects pent-up demand for exec condos in area: Experts
Published on Jan 08, 2014
By Melissa Tan
AN EXECUTIVE condominium (EC) site in Jurong West fetched an unexpectedly bullish top bid yesterday in a closely fought 12-way tussle.
Consultants said the top offer of $198.9 million for the plot in Westwood Avenue reflected pent-up demand for ECs in the area and developers' hunger for land.
It came despite recent government measures that made it more difficult for people to buy EC units, which are a hybrid of public and private housing.
The top bid was lodged by a tie-up between Koh Brothers unit Changi Properties and Heeton Homes.
The price works out to $382 per sq ft (psf) per plot ratio (ppr) for the 186,052 sq ft land parcel, just above the high end of market expectations of between $285 psf ppr and $380 psf ppr.
The top offer narrowly edged out the second-highest bid of $380 psf ppr jointly lodged by City Developments unit Verwood Holdings and TID Residential.
The number of bids was also higher than the six to 10 that consultants had predicted.
CBRE research head Desmond Sim added that the "relatively palatable" total quantum likely boosted the number of bids.
The site is near amenities such as Gek Poh Shopping Centre, Pioneer Mall, Jurong West Stadium and Jurong West Public Library.
The bullish top bid came despite this plot being the first to go on sale since the Government put restrictions on the EC segment last month.
The Government tightened financing for EC purchases by capping mortgage payments at 30 per cent of monthly pay, and imposed a resale levy on certain EC buyers.
These new restrictions could have led to the huge gap between the top and bottom bidders at yesterday's tender, consultants said.
The lowest bid was $180 psf ppr lodged by Sim Lian.
The wide range of bids shows that developers are reading the EC market differently, said Jones Lang LaSalle Singapore research director Ong Teck Hui.
Alternatively, SLP International research head Nicholas Mak said that some of the lower bidders could have been "bottom-fishing" for a bargain in hopes that the new rules would reduce the future prices of ECs.
Colliers International research head Chia Siew Chuin said the developer that wins the site could make up for bidding high by building units that are smaller than the average size to keep them affordable.
Consultants expect the break-even cost to be from $650 psf to $750 psf, and the selling price to be around $800 psf to $820 psf.
The site is estimated to yield 485 homes and is on a 99-year lease.
[email protected]