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Thread: MCC Land puts in top bid for Tampines condo site

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    Default MCC Land puts in top bid for Tampines condo site

    http://www.straitstimes.com/archive/...-site-20150429

    MCC Land puts in top bid for Tampines condo site

    Published on Apr 29, 2015 3:06 AM


    CHINESE developer MCC Land seems to regard Tampines as its own turf, going by the fight it has put up for a site in the area.

    The firm, which is developing The Santorini in Tampines Avenue 10, has lodged the top bid in a 12-horse race for a plot along the same road.

    MCC Land's offer of $227.78 million or $482.59 per sq ft per plot ratio (psf ppr) was just 7 per cent over the second highest offer of $451.04 psf ppr lodged by Malaysian tycoon Robert Kuok's Allgreen Properties.

    The 12 bids in the tender which closed yesterday are a "healthy number as developers are running low on land", said Mr Desmond Sim, CBRE's research head for Singapore and South-east Asia.

    "Bidders were probably spurred on by the very palatable, affordable total quantum," he added.

    The 99-year leasehold site of roughly 1.57 ha can support an estimated 490 homes.

    But the value of the bids shows that developers remain cautious, said Rodyk & Davidson partner Lee Liat Yeang.

    Just three were above $438 psf ppr, which is the lowest winning bid for a Government Land Sales site in the past two years. That was for a Fernvale Road site in August last year.

    "There may have been a bit of bottom fishing," said Mr Lee. The lowest bid - at $269.89 psf ppr - came from Edition Land, a subsidiary of Singapore Exchange-listed Edition Limited.

    The last land tender in the area was for The Santorini site, in July 2013. It was won by MCC Land with a bid of $562 psf ppr.

    Bids at yesterday's tender averaged $390 psf ppr, significantly lower than the average of $434 psf ppr for The Santorini plot, said JLL national research director Ong Teck Hui.

    Mr Lee noted that while the top bid this time is about 14.1 per cent lower than that for The Santorini plot, construction costs have run up since then.

    Units at The Santorini were launched last year at a median price of $1,108 psf. The 597-unit development has 418 unsold units.

    But, Mr Ong said, nearby Q Bay Residences, which was launched in 2013, is fully sold at an average price of $1,043 psf.

    MCC Land's estimated breakeven price for the new project is $980 to $1,040 psf, said SLP International executive director Nicholas Mak, who also noted that the site poses challenges.

    These include a large industrial B2-zoned plot just across the road.

    There could also be strong leasing competition from four condos and one executive condominium in the area, representing about 3,000 units in all.

    A site next door on the reserve list that could accommodate 675 units presents potential competition as well, added OrangeTee research manager Wong Xian Yang.

    An MCC Land spokesman said it plans to develop a condo of about 500 units.

    He noted that Tampines Regional Centre has many "recreation, residential, economic and educational developments" and is set to become an "even shinier jewel of the East... more home buyers should be drawn to its future prospects".

    RENNIE WHANG

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    Default MCC makes defensive bid for Tampines Ave 10 site

    http://www.businesstimes.com.sg/real...es-ave-10-site

    MCC makes defensive bid for Tampines Ave 10 site

    That the site drew 12 bids is a reflection of the continuing drive by developers to replenish their land bank, albeit at moderated prices, say property market observers

    By Kalpana Rashiwala

    [email protected]@KalpanaBT

    29 Apr


    IN a reflection of developers' hunger for land, a 99-year private residential site in what would be regarded as a mediocre location along Tampines Avenue 10 attracted a dozen bids on Tuesday, when the state tender closed.

    The relatively affordable absolute land price quantum for the site, Parcel D, was also a factor for the high participation rate, said Desmond Sim, head of Singapore and SE Asia at CBRE Research.

    The bids ranged from S$127.4 million to S$227.8 million.

    China developer MCC Land's top bid of S$227.78 million, or S$482.59 per square foot per plot ratio (psf ppr), was considered slightly bullish by property consultants such as OrangeTee's manager for research and consultancy Wong Xian Yang.

    SLP International executive director Nicholas Mak said MCC Land's bid was slightly beyond the upper band of the S$430 to S$480 psf ppr range he had predicted when the site was launched last month.

    Market watchers saw this as a reflection of MCC Land's need to protect its pricing power for the nearby Santorini condo on Parcel B, where it has sold only 32 per cent of the total 597 units.

    MCC Land said on Tuesday evening that it plans to launch a condo comprising about 500 units on Parcel D in the first half of next year.

    Putting things in perspective, JLL national director Ong Teck Hui noted that what MCC Land bid for Parcel D was lower than the S$562.01 psf ppr it paid for Parcel B in a July 2013 state tender; MCC's lower pricing for Parcel D also factors in the more subdued market conditions today.

    The bids in Tuesday's tender ranged from S$270 to S$483 psf ppr, significantly lower than the S$355 to S$562 psf ppr during the tender for Parcel B nearly two years ago. That tender drew 10 bids.

    The average bid at the latest tender, S$390 psf ppr, was also lower than the S$434 psf ppr for Parcel B.

    Market watchers estimated that MCC Land's top bid for Parcel D would result in a break-even cost of S$920 to S$950 psf, which opens the way for the project to be priced at around S$1,000 psf on average.

    Mr Ong said: "Units in the area have to be priced close to this price level in order to sell."

    With MCC having launched The Santorini last year at a median price of S$1,108 psf, 68 per cent of units have yet to find takers.

    Mr Ong added: "Q Bay Residences (on Parcel A next door), which was launched in 2013, before the total debt servicing ratio framework was introduced, has sold out its units - but at a lower average price of S$1,043 psf."

    SLP's Mr Mak said that while Parcel D is a stone's throw from the United World College of South East Asia, it is not within a comfortable walking distance of an MRT station.

    He added: "With the large industrial Business 2-zoned land parcel across Tampines Avenue 10 from the subject site, the future condo would be very near a large industrial estate."

    Moreover, some investors may not be drawn to the Parcel D project because of the large number of new condo units already in the vicinity.

    At yesterday's tender, MCC Land's top bid was 7 per cent more than the next highest bid of S$451.04 psf ppr by Robert Kuok's Allgreen Properties.

    A tie-up between Evia Real Estate (7) and UE E&C unit Maxdin was in third place, at S$438.71 psf ppr. Singapore Land unit Singland Homes priced the site at S$425.85 psf ppr.

    Also bidding were Frasers Centrepoint unit FCL Place (S$400.19 psf ppr) and EL Development (S$390.04 psf ppr).

    A partnership involving 10 Tampines, Kenyon Pte Ltd and HSB Developments (a unit of Hwa Seng Builder) offered S$390 psf ppr. Victoria Capital, owned by Tan Koo Chuan and Melvin Poh, bid S$381.36 psf ppr.

    Tripartite Developers came in with a bid of S$370.77 psf ppr and Wee Hur Development, S$357.82 psf ppr.

    Sim Lian Land was the second-lowest bidder at S$320 psf ppr. The lowest bid of S$269.89 psf ppr was from Edition Land, whose directors are Ong Kai Hian and Ong Kai Hoe.

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