http://www.straitstimes.com/archive/...ikely-20150211
Interest in site near Little India seen, but low bids likely
Published on Feb 11, 2015 1:20 AM
By Cheryl Ong
A SITE near Little India - the first of six sites to be sold under the Government Land Sales programme for the first half of the year - was rolled out yesterday.
The 99-year leasehold site in Sturdee Road can accommodate a condominium with 265 units.
Analysts expect the tender to attract keen interest from developers. However, most said that while the site is well-located, close to the Farrer Park MRT station, it is likely that weak property market sentiments will weigh on bid prices.
The Government has scaled back on land sales to guard against an oversupply of units, giving developers much less land to fight over this year. A moderation in land sales will allow the market to absorb unsold inventory.
The size of the 65,784 sq ft parcel in Sturdee Road will be "palatable" to developers, as that will keep the total price of the site down, the analysts said. It was put on the confirmed list, which means it will go on sale regardless of interest. Sites on the reserve list are put out to tender only if developers make an acceptable initial offer. The site, which is in an "emerging trendy enclave", will be "well-served" by F&B and entertainment outlets, said Mr Desmond Sim, head of research at CBRE South-east Asia.
With a potential gross floor area of 230,251 sq ft, it can accommodate a 30-storey condominium, said the Urban Redevelopment Authority.
Analysts expect seven to 15 bids, with a potential tender price of $138 million to $166 million, or $600 to $720 per sq ft (psf) per plot ratio. "Under better market conditions, demand for this site would have been red-hot, with robust bidding. But sentiments are now softer and developers are also more cautious, so keen interest is likely to be tempered by some realism in bidding," said Mr Ong Teck Hui, national director of research and consultancy at JLL.
Based on the estimates, units at the new condominium could be sold for $1,250 to $1,350 psf.
At the 862-unit Eight Riversuites project in Whampoa East, units have fetched an average of $1,290 psf, while units at the 910-unit City Square Residences have been sold for an average of $1,508 psf, data from Squarefoot Research showed.
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