URA rejects sole bid for Tampines condo site, saying it's too low

http://www.businesstimes.com.sg/sub/...94066,00.html?

Published August 27, 2008

URA rejects sole bid for Tampines condo site, saying it's too low

By KALPANA RASHIWALA


FOR the fourth time this year, the government has rejected bids at a state land tender for being too low, amidst weakening property market sentiment and rising construction costs that have forced bidders to clip their land bids.

And what's interesting is that in three of the four instances, the top or sole bidder was the Midview group, involved in the construction and property businesses as well as in general trading.

The company, controlled by Lim Kim Hong and Lim Huixing, has its office at Midview Building at Bukit Batok Street 23.

Yesterday, Urban Redevelopment Authority (URA) turned down the sole bid for a private condominium housing site at Tampines Avenue 1/Avenue 10 as the price offered was too low.

The 99-year leasehold plot, which faces Bedok Reservoir, drew a bid of about $118 per square foot per plot ratio (psf ppr) from Midview unit Boon Keng Development Pte Ltd.

The sole bid was below general market expectations, which ranged from $150 to $230 psf ppr. When the tender for the site closed on Aug 12, most property consultants had already said there was only a slim chance of the site being awarded.

The three sites where bids were earlier rejected by the state for being too low were the Ten Mile Junction site in Choa Chu Kang (which was to have a residential component), a landed housing plot at Westwood Avenue in Jurong, and a transitional office site at Aljunied Road/Geylang East Avenue 1.

Midview group was the top bidder for the Westwood Avenue plot as well as the sole bidder for the transitional office site.

Analysts have also pointed out that some of these sites were not that attractive to begin with.

The latest Tampines plot that was not awarded, for instance, does not have strong attributes like transportation links or proximity to amenities.

An industry observer also highlighted an element of opportunistic bidding seen, especially on the part of contractors, at recent state tenders.

'With the current market uncertainty and most developers keeping away from land tenders, some players see a chance to try and get land on the cheap and hopefully reap a windfall. I guess it's their business strategy: They can manage construction costs better, plus if they can get land at low cost, and even if the property market comes down, say, 30-40 per cent, they would still be OK,' he said.

The Tampines Avenue 1/10 plot was offered through the confirmed list of the Government Land Sales programme where sites are released according to a pre-stated schedule and the government's minimum or reserve price is not made known.

Separately, the Housing & Development Board yesterday made available for application a 99-year condo plot at Yishun Ave 2/Yishun Ave 7/Canberra Drive through the reserve list.

The plot will be launched for tender only upon successful application by a developer, with an undertaking to bid at a minimum price that is acceptable to the state.

http://www.straitstimes.com/Money/St...ry_272226.html

August 27, 2008 Wednesday

Tampines site: Sole bid rejected


THE sole bid for a Tampines condominium site overlooking Bedok Reservoir has been shot down for being too low.

Boon Keng Development's optimistic offer of $84.6 million, or $118 per sq ft (psf), for the site was just not enough, said the Urban Redevelopment Authority (URA) yesterday.

Consultants were not surprised that the bid was rejected.

They had previously said that anything from $150 to $230 psf would have been more reasonable as apartments on the 3.2ha site could sell for up to $700 psf.

According to Knight Frank's director of research and consultancy, Mr Nicholas Mak: 'If the Government had accepted it, it would be taken as a signal that it is lowering its reserve price for all other sites.

'Or (a signal) the Government is of the opinion that the land price has fallen to the same level as that during the 1998 recession.

'Even then, the last piece of government land sold in 1997 before site tenders were suspended because of the recession was $171 psf for a piece of land at Hougang Street 11.

'So it was too optimistic to expect the government to award this bid.'

The tender for the 99-year residential site at the junction of Tampines Avenue 1 and 10 was launched on June 17 and closed on Aug 12.

MICHELLE TAY