Another condo site to go on sale

http://www.businesstimes.com.sg/sub/...42967,00.html?

Published July 23, 2009

Another condo site to go on sale

URA gets offer for 99-year leasehold site on reserve list at Dakota Crescent

By KALPANA RASHIWALA


(SINGAPORE) For the second time this week, a 99-year leasehold condo site on the government reserve list has been triggered for launch.

Urban Redevelopment Authority said yesterday it has received a successful application for the 1.7 hectare site, which is located at Dakota Crescent and is next to the Dakota Residences condo being developed by Ho Bee.

The developer that successfully applied for the latest plot to be released has undertaken to bid for the site at a minimum $130 million, which works out to about $200 per square foot of potential gross floor area.

This is 62 per cent lower than the $524 psf per plot ratio (psf ppr) that Ho Bee paid for its site in June 2007. Ho Bee launched Dakota Residences at an average price of about $970 psf last year.

It relaunched the project a few months ago at an average price of about $900 psf. URA's monthly developer sales figures for June show a total 27 units were sold in the project during the month at a median price of $870 psf.

Knight Frank chairman Tan Tiong Cheng reckons the top bid for the site could be about $350 psf ppr, which would work out to a breakeven cost of of slightly below $700 psf. 'Bidding should be hot.

'The site is next to Dakota MRT station and fronts the Geylang River. And it's in a proven location,' he added.

Based on URA statistics, Ho Bee had sold about 60 per cent of the 348-unit Dakota Residences as at the end of last month.

Earlier this week, the Housing & Development Board (HDB) said it will launch the tender for a 99-year leasehold site for a condominium development at Chestnut Avenue on the reserve list after receiving a successful application.

Following up on that announcement, HDB said yesterday that the tender for the site will close at noon on Aug 19. That plot was also from the government's reserve list, and its launch follows a successful application by an unnamed party undertaking to bid at least $62 million at the tender, which works out to $120.83 psf ppr.

Mr Tan expects developers to trigger launches of more residential sites from the government reserve list, as it offers a good source of land for developing entry-level condos catering to HDB upgraders.

'Right now, a lot of developers are focusing on the mass market; they've seen a recovery in the low end and it seems a safer bet. They may already have enough stock of high-end sites,' he added.

Locations of residential sites in the second-half 2009 reserve list include Tampines, Jalan Jurong Kechil, Upper Thomson Road, Bishan St 14 and Serangoon Avenue 3.

http://www.straitstimes.com/Money/St...ry_406819.html

July 23, 2009 Thursday

Another reserve site draws bid

Dakota Crescent condo site gets $130m offer; Chestnut Avenue plot put up for tender today

By Fiona Chan


FOR the second time in less than a week, the Government has received an offer for one of its condominium sites - after a 10-month drought during the recession in which it was unable to sell any residential land.

Yesterday, the Urban Redevelopment Authority said it has received a minimum bid of $130 million for a 1.7ha site at Dakota Crescent, near the upcoming Dakota MRT Station on the Circle Line.

This comes just three days after an unnamed developer offered $62 million for a land parcel at Chestnut Avenue in Bukit Panjang on Monday.

Both sites are on the Government's reserve list, which means they are available for sale but are not put up for public tender until a developer pledges to put in a minimum bid.

The Chestnut Avenue site will be put up for tender today, while the Dakota Crescent site will be launched for tender in about two weeks.

The $130 million minimum bid that will be put in for the Dakota site works out to about $200 per sq ft (psf) of the potential gross floor area, which is about 650,000 sq ft, according to veteran property consultant Nicholas Mak.

He expects that when other bids come in during the tender, they could reach $350 to $370 psf of gross floor area, or $227.5 million to $240.5 million.

'The site is fairly attractive because of its proximity to the upcoming Dakota MRT Station,' he said, adding that the apartments that will be built on it can cater to HDB upgraders as well as investors on a tighter budget.

But Ms Tay Huey Ying, director for research and advisory at property firm Colliers International, said developers may not be overly keen on the site and probably only mid-sized and larger developers would bid for it.

She believes developers will stay cautious and limit their interest to sites that cost less than $150 million and that are located in the suburbs or the city's fringes, where demand is strong now.

No state-owned residential land has been sold since September last year, when a site at the junction of New Upper Changi Road and Tanah Merah Kechil Avenue was awarded for $84 million.

Even that site was on the Government's confirmed list, which means it was put up for sale at a fixed date regardless of whether developers had expressed any interest in it. The last time a developer has proactively put in a bid for a reserve-list site was almost two years ago, in November 2007.

But property consultants say developers could now be looking to replenish their land banks, given that they are now selling more new homes to buyers who are returning to the market in droves.

Developer GuocoLand, for instance, said yesterday that it has sold 117 of the 272 units in one of its projects, Sophia Residence in Mount Sophia.

It had released 38 units initially and sold them all, so another 100 units were made available during the project's official launch last weekend, GuocoLand said in a statement. Selling prices range from $1,450 to $1,850 psf, and all the studio and two-bedroom units - which start from about 600 sq ft - have been sold.

Six in 10 of the buyers so far are Singaporeans. The rest are permanent residents as well as foreigners from Indonesia, Malaysia, South Korea, Taiwan, Myanmar, China, Australia and Europe, the developer said.

Only 20 per cent of buyers took up the interest absorption scheme that allows buyers to defer the bulk of their payments until their units are completed. The rest opted for the normal progressive payment scheme at a 2 per cent discount.

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