http://www.businesstimes.com.sg/archive/friday/premium/singapore/anchorvale-crescent-ec-site-draws-keen-interest-20140214
Published February 14, 2014
Anchorvale Crescent EC site draws keen interest
12 bids submitted, showing developers' confidence in EC market demand
By Mindy Tan
[email protected]
DEVELOPERS' confidence in executive condominiums (EC) remains strong, going by the latest tender for a site in Sengkang.
The 99-year leasehold site at Anchorvale Crescent drew 12 bids at the close of its tender period yesterday, with the top bid of $192.89 million which translates to $366.91 per square foot per plot ratio (psf ppr). This bid was put up by SingHaiyi Group's Phoenix Real Estate.
"The interest in this site is particularly strong with 12 parties contesting and the top six bidders within a 4.8 per cent margin," noted Ong Teck Hui, national director, research and consultancy, at Jones Lang LaSalle.
It specifically reflects developer's confidence in demand for EC homes, said Eugene Lim, key executive officer at ERA Singapore.
"The keen interest for this site also shows that developers are hungry for land sites to build their land bank," he added.
The second highest bid, put up by MCL Land (Brighton), was $191 million, or $363.32 psf ppr. Fantasia Investment (Singapore) - believed to be a unit of Hong Kong-listed Fantasia Holdings Group - rounded up the top three bids with a tender price of $189.4 million, or $360.21 psf ppr.
The lowest bid of $139 million or $264.41 psf ppr was put up by Wee Hur Development.
That developers are confident of the EC market segment is perhaps unsurprising given that demand for ECs in the Sengkang area has been encouraging.
"Lush Acres in Sengkang West Way sold 311 of its 388 units in just August 2013 alone, at a median price of $790 psf. Given this experience, the unit pricing for the development on this site is likely to be optimistic," said Mr Ong.
ERA's Mr Lim said he reckons the developer might launch future units at above $800 psf.
Nicholas Mak, executive director at SLP International, was of the opinion that developers were being "very bullish" given the latest curbs on the EC market.
Compared with a separate EC site that was picked up by Qingjian Realty in May last year (before the latest property curbs were introduced on Dec 9), the subject site's top bid is 11 per cent higher. As such, only the EC project on the subject parcel will be subjected to both the HDB resale levy and the maximum Mortgage Servicing Ratio (MSR) of 30 per cent.
"As all the EC developments that are already launched for sale to homebuyers today are not subjected to the HDB resale levy, the effects of this levy on the demand for EC is unknown. This could explain why some developers are not perturbed by the latest curbs on EC," said Mr Mak.
Most of the EC buyers who are HDB upgraders would usually own four-room or larger HDB flats. The HDB resale levy can range from $40,000 for a four-room HDB flat to $50,000 for an executive flat. This levy could translate to a tax of about $40 psf to $50 psf for the average three-bedroom EC unit," he added.
Measuring 175,236.29 sq ft, the site has maximum gross floor area (GFA) of 525,708.88 sq ft, and maximum building height of 64 metres above mean sea level. It is expected to yield about 656 dwelling units.
In a statement released on SGX, SingHaiyi Group said it expects to undertake the development of the project subject to the award of the tender.
The Sengkang area is also home to two new projects that are being launched this month - UOL's 555-unit Riverbank@Fernvale and Rivertrees Residences by Frasers Centrepoint, Far East Orchard and Sekisui House.