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Thread: CityDev sets record price for Choa Chu Kang EC land

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    Default CityDev sets record price for Choa Chu Kang EC land

    http://www.businesstimes.com.sg/sub/...10340,00.html?

    Published March 23, 2011

    CityDev sets record price for Choa Chu Kang EC land

    Its venture with TID places top bid of $320.86 psf ppr for the site

    By KALPANA RASHIWALA


    CITY Developments Ltd (CDL) yesterday set a record price - albeit just by a whisker - for executive condominium (EC) land.

    The seasoned developer's bid for the 99-year leasehold plot at Choa Chu Kang Drive has been seen as defending the pricing for an upcoming EC project that it will launch in a few months on a plot that it had clinched last December.

    At yesterday's tender, a joint venture between CDL and TID placed the top bid of $170.1 million or $320.86 per square foot per plot ratio.

    This was marginally higher than the previous high of $320.58 psf ppr that a United Engineers-led partnership paid for an EC plot in Sengkang East Avenue and Buangkok Drive last May. This is being developed into the Austville Residences project.

    The CDL-TID bid for the Choa Chu Kang plot is higher than the estimates given by property consultants when the site was launched in January - $220-280 psf ppr. Nonetheless, some analysts were not altogether surprised by CDL's bullish bid.

    In December, CDL clinched an EC site at Segar Road, near Segar LRT Station and facing Kranji Expressway, at $270.51 psf ppr. The land parcel tendered yesterday is about 2.2 km away, in a more choice location closer to Choa Chu Kang MRT Station and Lot 1 mall.

    'Basically, they could not afford to have someone bid lower for a better site than what they had paid for their Segar Road site. It makes sense for them to try and defend prices in the area,' said a developer.

    CDL is planning to develop a 602-unit project on the Segar Road plot which it expects to launch around the middle of this year.

    Yesterday evening, a CDL spokeswoman said that the scheme for the latest Choa Chu Kang plot involves a project of up to 20 storeys with about 460-470 units. She also highlighted the group's familiarity with the location, having developed Lot 1 and Guilin View condo.

    'CDL . . . is well placed to maximise the potential of the site . . . We are confident that there will be strong demand from young families and upgraders for this well-positioned EC site.'

    This will be the CDL group's fifth EC project.

    ECs are a hybrid of public and private housing with initial buyer eligibility and resale restrictions, which are completely lifted 10 years after an EC project has been completed.

    The CDL-TID bid was nearly 7 per cent higher than the next highest bid of about $300 psf ppr, from a tie-up between Frasers Centrepoint and Keong Hong Construction.

    The other bidders were Qingdao Construction (Singapore), $289.92 psf ppr; Mequity (Hillview), whose shareholders include Roxy-Pacific and Macly Capital, $261.82 psf ppr; Wee Hur Development, $225.60 psf ppr; and Mezzo Development, $221 psf ppr.

    CBRE Research executive director Li Hiaw Ho estimates CDL-TID's break-even cost at about $650 psf. 'In January-February 2011, units in Mi Casa (a 99-year leasehold private condo next door) were sold at around $800 psf. It is likely that the new EC project can fetch around $700 psf on average, a differential from the price of private condominiums to take into consideration the eligibility conditions attached to EC.'

    Cushman & Wakefield senior manager for Asia-Pacific research Ong Kah Seng said: 'The optimistic price received for the Choa Chu Kang EC site is largely due to encouraging take-up of new EC projects launched in recent months. Buying interest for resale ECs is also encouraging as they're more attractively priced than private condominiums, reflecting the attractiveness of ECs for an owner who eventually re-sells the home after fulfilling the required occupation period.'

    Credo Real Estate executive director Ong Teck Hui said: 'Since EC prices take reference from private residential prices, bidders must be optimistic that the private residential market would hold or even strengthen going forward. If that continues, there will be that sandwich class of buyers to cater to.'

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    http://www.straitstimes.com/Money/St...ry_648168.html

    Mar 23, 2011

    Choa Chu Kang EC site gets $170m bid

    CDL, TID joint bid tops 5 others for site near MRT


    A JOINT $170 million bid by City Developments (CDL) and TID has topped a competitive six-way fight for an executive condominium (EC) site in Choa Chu Kang.

    The amount - a $321 per sq ft (psf) per plot ratio - is 7 per cent higher than the next bid of $159 million submitted by Frasers Centrepoint and Keong Hong Construction.

    The 99-year leasehold site in Choa Chu Kang Drive, not far from the MRT station, is 189,335 sq ft. With a plot ratio of 2.8, the new development is permitted to be built up to a maximum gross floor area of 530,138 sq ft, yielding up to 490 units.

    Qingdao Construction was not far behind in the No. 3 spot with a bid of nearly $154 million, with Roxy-Pacific Holdings bidding $139 million. Next came Wee Hur Development with $120 million, followed finally by Mezzo Development's $117 million bid.

    This is the first EC plot to go on sale since the January market cooling measures.

    Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, said the psf value of yesterday's top bid was significantly higher than that of previous winners of EC tenders that closed before the January measures.

    The last EC site to achieve the same psf value was a plot in Sengkang East Avenue and Buangkok Drive, fetching $176 million or $321 psf ppr in May last year.

    Other analysts said interest in the site was due to its proximity to the MRT station. Said SLP International executive director of research and consultancy Nicholas Mak: 'There has not been a new supply of ECs in the Choa Chu Kang area since The Quintet was launched in 2003. So some developers expect some pent-up demand for ECs in that region.'

    CBRE research shows that units in the neighbouring private apartment project Mi Casa sold at around $800 psf earlier this year.

    Analysts say the new EC project could sell for about $700 psf. CDL said that if it wins the tender, to be announced at a later date, it plans to build an EC of up to 20 floors with up to 470 units, making it the group's fifth EC project.

    CHERYL LIM

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