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18-03-14, 16:51
http://www.straitstimes.com/archive/wednesday/premium/money/story/yishun-residential-site-draws-top-bid-279m-20140312
Yishun residential site draws top bid of $279m
Published on Mar 12, 2014
By Melissa Tan
A 99-YEAR residential site in Yishun drew muted bidding by the close of its tender yesterday with only five offers lodged.
Still, the top bid of $278.8 million from EL Development was higher than expected and a record for the area.
Consultants said developers were bidding more cautiously amid a softening private residential market and rising construction costs.
The location of the Yishun Avenue 9 site near an industrial zone could also have deterred bidders, they added.
EL Development's bid for the 221,239 sq ft parcel works out to $450 per sq ft (psf) per plot ratio (ppr).
This was higher than the range of $390 psf ppr to $431 psf ppr that consultants had earlier predicted, though the number of bids was at the lower end of the range they had tipped.
OrangeTee research head Christine Li said that it was also a historical high for a purely residential private plot in Yishun, with the previous record being $406 psf ppr in August 2010 for a land parcel that has been developed into The Miltonia Residences.
EL Development managing director Lim Yew Soon said yesterday that it had run out of land and had been bidding at "quite a few" state tenders.
The firm plans to build a 600- to 660-unit development on the plot, he said.
Its bid trumped the next highest offer of $441 psf ppr - from a Frasers Centrepoint-led consortium - by only 2 per cent.
Noting that the four highest offers fell within a narrow 10 per cent band, CBRE Singapore research head Desmond Sim said this likely reflected developers' restraint in bidding.
"Developers are mindful of the changing tides and softening of the market."
The Government's move on Monday to shift the focus away from cash premiums for Housing Board resale negotiations could dampen HDB upgrader demand for private homes, he said.
The lowest bid was $365 psf ppr from Sim Lian.
SLP International research head Nicholas Mak said that given a softening residential property market and rising construction costs, some developers are now more cautious in their bids especially for residential sites that are not near MRT stations.
JLL Singapore research director Ong Teck Hui said the plot's proximity to an industrial zone could also have played a part.
"Some buyers of residential units would be biased against projects near industrial developments and this would have influenced bidding for this site."
The site can yield 685 units and is within walking distance of Chip Eng Seng's future mixed- use development Junction 9.
Chip Eng Seng was also one of the bidders in the tender for the Yishun Avenue 9 plot and lodged an offer of $423 psf ppr.
Consultants estimated a break-even price of $925 psf to $940 psf for the site and a selling price of at least $1,000 psf.
[email protected]
Yishun residential site draws top bid of $279m
Published on Mar 12, 2014
By Melissa Tan
A 99-YEAR residential site in Yishun drew muted bidding by the close of its tender yesterday with only five offers lodged.
Still, the top bid of $278.8 million from EL Development was higher than expected and a record for the area.
Consultants said developers were bidding more cautiously amid a softening private residential market and rising construction costs.
The location of the Yishun Avenue 9 site near an industrial zone could also have deterred bidders, they added.
EL Development's bid for the 221,239 sq ft parcel works out to $450 per sq ft (psf) per plot ratio (ppr).
This was higher than the range of $390 psf ppr to $431 psf ppr that consultants had earlier predicted, though the number of bids was at the lower end of the range they had tipped.
OrangeTee research head Christine Li said that it was also a historical high for a purely residential private plot in Yishun, with the previous record being $406 psf ppr in August 2010 for a land parcel that has been developed into The Miltonia Residences.
EL Development managing director Lim Yew Soon said yesterday that it had run out of land and had been bidding at "quite a few" state tenders.
The firm plans to build a 600- to 660-unit development on the plot, he said.
Its bid trumped the next highest offer of $441 psf ppr - from a Frasers Centrepoint-led consortium - by only 2 per cent.
Noting that the four highest offers fell within a narrow 10 per cent band, CBRE Singapore research head Desmond Sim said this likely reflected developers' restraint in bidding.
"Developers are mindful of the changing tides and softening of the market."
The Government's move on Monday to shift the focus away from cash premiums for Housing Board resale negotiations could dampen HDB upgrader demand for private homes, he said.
The lowest bid was $365 psf ppr from Sim Lian.
SLP International research head Nicholas Mak said that given a softening residential property market and rising construction costs, some developers are now more cautious in their bids especially for residential sites that are not near MRT stations.
JLL Singapore research director Ong Teck Hui said the plot's proximity to an industrial zone could also have played a part.
"Some buyers of residential units would be biased against projects near industrial developments and this would have influenced bidding for this site."
The site can yield 685 units and is within walking distance of Chip Eng Seng's future mixed- use development Junction 9.
Chip Eng Seng was also one of the bidders in the tender for the Yishun Avenue 9 plot and lodged an offer of $423 psf ppr.
Consultants estimated a break-even price of $925 psf to $940 psf for the site and a selling price of at least $1,000 psf.
[email protected]