Mass-market site draws strong developer interest

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Published August 20, 2009

Mass-market site draws strong developer interest

Hong Leong puts in top bid of $280 psf ppr for the plot in Pasir Panjang

By UMA SHANKARI


(SINGAPORE) An impressive 13 bids were received for a residential site at Chestnut Avenue in Bukit Panjang at the close of the tender yesterday, reflecting the renewed interest and the growing positive outlook among developers for mass market residential projects.

And the top bid of $143.7 million - or $280 per square foot per plot ratio (psf ppr) - put in by two companies in the Hong Leong Group stable was also much higher than expected by analysts, who had predicted a top bid of $200 psf ppr just a month ago.

Analysts said that developers are looking to restock their landbanks after selling a large number of homes - mostly in the mass market - over the past few months.

'The level of interest shown by the bidders of this site at Chestnut Avenue indicate a growing appetite for mass market projects, especially so with suburban condominiums selling well in the present market,' said Leonard Tay, director of CBRE Research.

'With developers' landbank of suburban sites running low, more of the suburban land parcels on the government land sales reserve list are likely to be triggered in the remainder of the year.'

Colliers International's director for research and consultancy Tay Huey Ying agreed. While most developers still have fairly large high-end and luxury landbanks (as sales in these segments have been slow), their mass market landbanks have diminished greatly since the start of the year, Ms Tay said. And since mass market sites are hard to come by in the private sector, the government's land sales programme is expected to be popular.

Among the bidders were large property groups such as Far East Organization, Sim Lian Land, Ho Bee Investments, Allgreen Properties and Frasers Centrepoint. Far East Organization made the second highest bid of $129.1 million, or $252 psf ppr.

The 99-year leasehold site in the state's reserve list was triggered for launch last month, marking the first time in a year that the government has offered a residential site for tender. Then, the applicant who triggered the tender agreed to bid at least $62 million for the site, which works out to $121 psf ppr.

Under the reserve list system, the state offers a site for sale only if there is an application by a developer undertaking to bid at a minimum price acceptable to the government.

Property consultants said then that the successful bid for the site could come in anywhere between $136 and $200 psf ppr.

The top bid by Hong Leong Group is some 132 per cent above the minimum bid price.

The estimated breakeven price for a residential project based on a land price of $280 psf ppr should be around $550-580 psf, said CBRE's Mr Tay. So the eventual selling price might be around $650 psf to $700 psf when the project is ready to launch, he added.

http://www.straitstimes.com/Money/St...ry_418962.html

August 20, 2009 Thursday

Bids pour in for Bukit Panjang condo site

By Joyce Teo


THE fast-improving property market has prompted 13 developers to submit bids to buy a 99-year leasehold suburban land parcel in Bukit Panjang.

The top bid for the Chestnut Avenue condominium plot came in higher than expected at $143.68 million or $280 per sq ft (psf) of gross floor area. This was 132 per cent above the minimum acceptable bid of $120 psf of gross floor area.

The bid came from a joint venture between City Developments' Sunny Vista Developments and Hong Leong Group's Hong Realty. The 22,700 sq m of land can accommodate about 450 flats.

Some of the other top bids are: Sim Lian Land with a bid of $113 million and First Changi Development, a GuocoLand subsidiary, with a bid of $93.38 million.

Frasers Centrepoint put in the most conservative bid of $77 million or $151 psf of gross floor area - still within the range consultants had projected last month.

The 'impressive' number of bids reflects the renewed interest and the growing positive outlook among developers for mass-market residential projects, said CBRE Research director Leonard Tay.

This has been helped by the strong sales of suburban condominiums such as Meadows@Pierce in Upper Thomson and The Gale in Flora Road, experts said.

Still, the developers' bids indicate that they remain cautious. 'The pricing shows that the developers are realistic and not bidding at exceedingly high prices,' said property expert Nicholas Mak.

Based on the top bid, the estimated break-even price for the project should be about $550 to $580 psf, said Mr Tay. This means the eventual selling price might be about $650 psf to $700 psf.

Currently, resale prices of the nearby 99-year leasehold Maysprings range from $480 psf to $600 psf.

Prices at nearby 999-year leasehold and freehold projects such as The Linear, Hazel Park Condominium and Dairy Farm Estate range from $560 to $650 psf.

In a separate development, a group of investors has put up three landed housing sites for sale. Two are in District 15 while the third is in Lornie Road in District 11. These sites, zoned for two-storey bungalow or semi-detached houses, were purchased about two to three years ago when the market was booming.

'The property market growth is gathering pace and looking better these days. Prices have risen and there are not many sites around for sale,' said Mr Steven Ming, director for prestige homes at Savills Singapore, which is marketing the sites. The tender closes on Sept 17.