Yishun residential site draws top bid of $279m

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http://www.straitstimes.com/archive/...-279m-20140312

Yishun residential site draws top bid of $279m

Published on Mar 12, 2014

By Melissa Tan


A 99-YEAR residential site in Yishun drew muted bidding by the close of its tender yesterday with only five offers lodged.

Still, the top bid of $278.8 million from EL Development was higher than expected and a record for the area.

Consultants said developers were bidding more cautiously amid a softening private residential market and rising construction costs.

The location of the Yishun Avenue 9 site near an industrial zone could also have deterred bidders, they added.

EL Development's bid for the 221,239 sq ft parcel works out to $450 per sq ft (psf) per plot ratio (ppr).

This was higher than the range of $390 psf ppr to $431 psf ppr that consultants had earlier predicted, though the number of bids was at the lower end of the range they had tipped.

OrangeTee research head Christine Li said that it was also a historical high for a purely residential private plot in Yishun, with the previous record being $406 psf ppr in August 2010 for a land parcel that has been developed into The Miltonia Residences.

EL Development managing director Lim Yew Soon said yesterday that it had run out of land and had been bidding at "quite a few" state tenders.

The firm plans to build a 600- to 660-unit development on the plot, he said.

Its bid trumped the next highest offer of $441 psf ppr - from a Frasers Centrepoint-led consortium - by only 2 per cent.

Noting that the four highest offers fell within a narrow 10 per cent band, CBRE Singapore research head Desmond Sim said this likely reflected developers' restraint in bidding.

"Developers are mindful of the changing tides and softening of the market."

The Government's move on Monday to shift the focus away from cash premiums for Housing Board resale negotiations could dampen HDB upgrader demand for private homes, he said.

The lowest bid was $365 psf ppr from Sim Lian.

SLP International research head Nicholas Mak said that given a softening residential property market and rising construction costs, some developers are now more cautious in their bids especially for residential sites that are not near MRT stations.

JLL Singapore research director Ong Teck Hui said the plot's proximity to an industrial zone could also have played a part.

"Some buyers of residential units would be biased against projects near industrial developments and this would have influenced bidding for this site."

The site can yield 685 units and is within walking distance of Chip Eng Seng's future mixed- use development Junction 9.

Chip Eng Seng was also one of the bidders in the tender for the Yishun Avenue 9 plot and lodged an offer of $423 psf ppr.

Consultants estimated a break-even price of $925 psf to $940 psf for the site and a selling price of at least $1,000 psf.

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http://www.businesstimes.com.sg/arch...-site-20140312

Published March 12, 2014

EL Dev tops bids for Yishun condo site

By lee meixian [email protected]


EL Development trumped four other bids for a Yishun Avenue 9 site with its offer of $278.8 million.

This works out to around $450.06 per sq ft per plot ratio, exceeding consultants' expectations of $380-$431 psf ppr.

According to OrangeTee research, this marks "a historical high" for a residential non-landed government land sales site in Yishun, excluding mixed development". It beat the previous historical record for a Yishun site of $405.53 psf ppr in August 2010, where The Miltonia Residences condominium is now being built.

But Ong Teck Hui, the national director for research and consultancy at Jones Lang LaSalle, found the winning bid "modest" and the lowest for an Outside Central Region site, since the sale of the Vue 8 Residence parcel at $418 psf ppr in June 2012.

The tender response was also "mediocre", he said. It fell on the lower end of the four to eight bids expected by consultants, likely because of the parcel's distance from an MRT station, as well as its proximity to light industrial buildings.

This was despite the fact that the site's south-eastern flank borders a canal, which makes it considerably "waterfront". It also has an unblocked view of the sea.

In the tender that closed yesterday, the second-highest bid came from a consortium - made up of FCL Topaz, Tannery Holdings and Sekisui House - for $273.1 million, or $440.82 psf ppr.

The third highest bid was made by CEL Development, owned by the listed Chip Eng Seng, for $261.9 million, or $422.76 psf ppr.

CEL is also developing a 99-year leasehold condominium, Nine Residences, nearby at Yishun Avenue 9.

Yesterday, it said it had sold 70 per cent of its 186 residential units at an average price of $1,070 psf. Nine Residences is part of a mixed development which will also comprise a two-storey retail podium. It is expected to receive its temporary occupation permit in June 2017.

The fourth bid of $255 million was from a consortium comprising Verwood Holdings, Intrepid Investments and TID Residential, while the fifth bid of $226 million was submitted by Sim Lian Land.

That the first and fourth bids were less than 10 per cent apart suggests "some level of restraint on the part of developers", said Desmond Sim, head of CBRE Research, Singapore.

"Developers are mindful of the changing tides and softening of the market," he said.

The Yishun site was one of five sites launched for sale in December. The 99-year leasehold site has an area about 221,239 sq ft, with a maximum gross floor area of about 619,473 sq ft. It can yield about 685 units.

Yishun projects have been popular with buyers and have not seen much unsold new supply, consultants said.

Five existing projects are in the pipeline for district 27 (which also covers Sembawang and Admiralty), expected to be completed from now until 2016.

OrangeTee research head Christine Li said the current pipeline supply for the district is 3,680 units, including the mixed development site recently won by Fraser Centrepoint as well as yesterday's tender-closed site.

"This is a significant number of units, considering that there are only 3,456 private non-landed units in district 27 currently. We expect the developer to sell the project from $1,000 psf onwards," she said.