http://www.businesstimes.com.sg/sub/...37540,00.html?
Published March 30, 2012
Exec condo site in Punggol attracts healthy interest
Qingjian of China, which bagged nearby plot last year, is top bidder
By MINDY TAN
IN a sign that developers' interest in executive condominiums (ECs) is still strong, a 99-year leasehold EC site at Punggol Central/Edgefield Plains yesterday received a top bid of $136.7 million, or $319.69 per square foot per plot ratio (psf ppr).
The top bid, which beat nine others, was put up by Chinese firm Qingjian Realty (South Pacific) Group, which in November last year trumped four other developers with its $330 psf ppr bid for a 99-year leasehold residential site along Punggol Central.
That it was a closely-contested tender, with the top three bids in close range of just 4.1 per cent, shows that there is continued keen interest for EC sites and the increasingly popular Punggol address, said Chia Siew Chuin, Colliers International's director of research & advisory.
The second highest bid of $131.8 million, or $308.23 psf ppr, came from City Developments Limited's Sunmaster Holdings.
A joint bid by BBR Development, BPK Development and Ryobi Kiso Holdings' subsidiary Ryobi Development came in third at $131.37 million, or $307.22 psf ppr.
'Based on the land cost of $319.69 psf ppr and the prevailing average selling price of newer EC units located in the area, a new project at the subject site could break even in the region of $630 psf to $640 psf,' said Ms Chia.
Added Credo Real Estate executive director Ong Teck Hui: 'EC land prices are clearly trending up. The top bid, at $320 psf ppr is even higher than Prive's land price of $308 psf ppr fetched in June 2010. Prive has the advantage in location being less than 500 metres from Punggol MRT station and bus interchange while the subject site is about 700 metres away.'
Based on the land price, Mr Ong said the breakeven price would be around $700 psf, which translates to a targeted selling price of between $750 psf and $800 psf.
Prive, which is jointly developed by NTUC Choice Homes and Chip Eng Seng, is the first EC development in Punggol.
Noted Collier's Ms Chia: 'In addition to the buoyant demand for EC units, the various plans rolled out by the government for Punggol, including the newly completed 4.2-km waterfront promenade as well as the upcoming park at Punggol Point, contributed to the fervent response for the site.'
Li Hiaw Ho, executive director at CBRE, added: 'With the government's relaxation of the EC market such as raising the household income ceiling to $12,000 and allowing second-timers to buy ECs without having to pay a resale levy, demand for ECs is expected to remain healthy for the rest of 2012.'
That Punggol has become increasingly popular is clear, with recently launched residential projects selling well, he added.
The 992-unit Watertown condominium in Punggol Central is around 95 per cent sold while the 728-unit Twin Waterfalls executive condominium at Punggol Walk is around 83 per cent sold, at the median prices of around $1,250 psf and $730 psf respectively, pointed out Mr Li.
The top bid reflects a breakeven cost of $650 psf to $680 psf, and it is likely that the new project will be priced around $750 psf, he said.
Nicholas Mak, executive director, research and consultancy, SLP International Property Consultants, expects the breakeven price for the site to be in the range of $620 psf to $640 psf.
The subject site has a land area of 142,533 sq ft, and a maximum gross floor area of 427,600 sq ft.
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