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Thread: Tender for Sembawang EC site draws just two bids

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    Default Tender for Sembawang EC site draws just two bids

    http://www.straitstimes.com/archive/...-bids-20141001

    Tender for Sembawang EC site draws just two bids

    Published on Oct 1, 2014 1:28 AM

    By Jacqueline Woo


    THE tender for an executive condominium (EC) site in Sembawang limped to a close yesterday with just two bids - a stark sign of the cooling property market, said analysts.

    Qingjian Realty (Residential) lodged the higher bid at $229.38 million or $353 per sq ft (psf) per plot ratio (ppr).

    That easily topped the joint offer of $208.5 million or $320.88 psf ppr from City Developments unit Verwood Holdings and TID Residential.

    The 2.8ha site at the junction of Sembawang Road and Canberra Link could yield an estimated 605 homes.

    Mr Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, noted that the poor interest in the 99-year leasehold plot suggests "caution on the part of most developers (who are) abstaining from bidding".

    The steady supply of new EC projects to be launched in the northern part of Singapore from next year could have held developers back from participating, said Mr Nicholas Mak, executive director of research and consultancy at SLP International.

    R'ST Research director Ong Kah Seng noted that the top bid was "fairly high", given the sluggish movement in land bids after the range of cooling measures.

    Qingjian is positioned to price the units at below $1 million, added Mr Eugene Lim, key executive officer of ERA Realty.

    Qingjian general manager Li Jun said in a statement yesterday that the site is well-situated near the upcoming Canberra MRT station, which is expected to start operating in 2019.

    Citing "overwhelming response" to its other EC launches, such as Bellewoods at Woodlands, Mr Li added that the company remains "confident of the continual demand of the EC market".

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  2. #2
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    Default Just two bids for Sembawang Road EC site, but top bid bullish

    http://www.businesstimes.com.sg/arch...llish-20141001

    Published October 01, 2014

    Just two bids for Sembawang Road EC site, but top bid bullish

    Qingjian's S$353 psf ppr close to January bid for adjacent site

    By Kalpana Rashiwala

    [email protected] @KalpanaBT


    A TENDER for an executive condominium (EC) site along Sembawang Road/Canberra Link drew just two bids - one of the poorest participation rates ever for an EC site tender. However, the top bid of S$353 per square foot per plot ratio (psf ppr) by Qingjian Realty is considered on the high side.

    It was close to the S$350 psf ppr fetched for an adjacent site in January this year - despite the worsening property market sentiment since then.

    What is noteworthy is that a tie-up between City Developments Ltd (CDL) and TID that had clinched the January site, placed a bid of only S$320.88 psf ppr at Tuesday's tender for the latest site.

    This reflects the current cautious sentiment in the EC market, factoring in significant supply of some 2,000 units in the vicinity from projects to be launched including the latest plot as well as unsold units in Skypark Residences, said JLL national director Ong Teck Hui. Based on monthly developer sales data released by URA, as at end-August, there were 199 unsold units in the 506-unit development.

    Qingjian's bid was 10 per cent higher than the CDL-TID bid at the latest EC site tender.

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

    R'ST Research director Ong Kah Seng said Qingjian may have factored in a premium for the latest site because of its experience in the EC development segment and it may possibly hold the view that the authorities could lift some of the cooling measures affecting the EC market in stages starting next year.

    These include a 30 per cent mortgage service ratio cap and the time bar for the launch of an EC project - 15 months from the date of award of the site or after completion of foundation works, whichever is earlier. "It takes a developer who is experienced in the specific property segment to take a larger risk such as a decision to buy a site on possible policy reviews. Most developers, however, would not be such risk-takers as the level of uncertainty would be too high," Mr Ong added.

    The Sembawang Road site will be Qingjian's sixth EC project. SLP International executive director Nicholas Mak estimated Qingjian's breakeven cost at S$700-S$740 per square foot (psf).

    The group declined to comment on its breakeven cost but said that being involved in the construction trade, it is "able to keep prices affordable".

    Moreover, said Qingjian Realty (South Pacific) Group general manager Li Jun, the group remains confident of continual demand in the EC market - following the "overwhelming response" to the launch of the Bellewoods EC project in Woodlands over the weekend.

    The group received about 400 e-applications for the 561-unit project. The indicative average price is about S$750- S$820 psf. Bookings will begin on Nov 1. The group acquired the site for S$341 psf ppr at a tender in May 2013.

    Qingjian will open e-application for another EC project, the 651-unit Bellewaters in Anchorvale Crescent, from Oct 15. The group has also indicated a similar average price of S$750-S$820 psf. Bookings will start on Nov 7. Qingjian paid S$331 psf ppr for that site, also at a May 2013 tender.

    As for the latest Sembawang Road/Canberra Link site, Mr Li noted that it is about 400 metres from the proposed future Canberra MRT Station. "We are planning to develop about 600 units in that location," he added.

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