MCL tops bids at $213.5m for Yishun 99-yr condo site

Published March 26, 2008

MCL tops bids at $213.5m for Yishun 99-yr condo site

Offer of $350 psf per plot ratio is 68% above the next highest bid

By KALPANA RASHIWALA


MCL Land yesterday offered almost 70 per cent more than its closest rival in a state tender for a 99-year condominium site at Yishun fronting Lower Seletar Reservoir and close to Singapore Orchid Country Club/Golf Course.

The Hongkong Land subsidiary placed the highest of five bids the site drew. Its price of $213.5 million - or about $350 per sq ft of potential gross floor area - was 68 per cent higher than the next highest offer, of $127 million or $208 psf per plot ratio by Peak Properties unit Peak Green. Peak Properties is controlled by the Wee family.

The tender drew three other bids - from Frasers Centrepoint ($109.66 million or $180 psf ppr), Sim Lian Land ($92.6 million or $152 psf ppr), and Cheung Kong Holdings unit Billion Rise, which placed what some market watchers termed a cheeky bid of $57.74 million or just $95 psf ppr.

Asked how he felt about offering such a steep premium for the plot, MCL Land's CEO Koh Teck Chuan said: 'I bid at a price I'm comfortable with. I'm confident of making money on this project.'

The breakeven cost for a new condo development on the site will be about $680 psf, and MCL Land's bid model assumed an average selling price of $750-800 psf, he added.

The group plans a 480-500 unit condo development 15-16 storeys high. 'Because the site has a long frontage along the reservoir, we can design the project in such a way that almost every unit will face the reservoir,' Mr Koh said.

'We've studied the site. I climbed up the nearest HDB block and the view was breath-taking. I saw unobstructed views of the reservoir and greenery.

'And the site is within walking distance of Khatib MRT Station. This is a nice suburban housing location.'

Mr Koh pointed out that developers have adopted divergent strategies at state tenders lately. 'Some are using the current lull to fish for bargains, while those who need to replenish their landbanks tend to bid at closer to market prices,' he said.

MCL currently does not have any 99-year leasehold residential sites in its landbank, although it has a string of freehold residential projects it hopes to launch this year or next year. These are in locations like Holland Hill (in a joint venture with Ho Bee), Balmeg Hill in the Pasir Panjang area, Upper Serangoon Road, Boon Teck Road in the Balestier vicinity, Ewe Boon Road, Sixth Avenue and Seletar Hills.

CB Richard Ellis executive director Li Hiaw Ho said the 'fairly robust response' of five bids at yesterday's tender from major and mid-size developers signals 'developers' confidence in the suburban segment despite the current lukewarm response to new projects'.

Demand for the new condo on the plot at Yishun Avenue 1/2 is likely to come from HDB upgraders and those working in the northern part of Singapore, he added.