Choa Chu Kang EC site draws 11 bids

[reporter2]

http://www.businesstimes.com.sg/real...-draws-11-bids

Choa Chu Kang EC site draws 11 bids

Top bid of S$295 psf ppr is 7% above next highest offer; most bidders are cautious

By Kalpana Rashiwala

[email protected]@KalpanaBT

Jul 29, 2015


THE tender for a far-flung executive condominium (EC) site along Choa Chu Kang Avenue 5 has attracted 11 bids, more than the three to seven bids property consultants had forecast when the site was launched in May.

Analysts attribute this to residential developers' continued hunger for land, the raw material they need to keep their businesses going, even when the property market outlook appears dim.

The top bid of S$295 per square foot per plot ratio (psf ppr) from a Qingjian Realty-led consortium at Tuesday's tender closing was within the S$250-330 psf ppr band that consultants had predicted. It was, however, 7 per cent more than the next highest offer of about S$276 psf ppr from TID Residential.

The vast majority or eight of the 11 bidders priced the site below S$250 psf ppr - cognisant of the challenges facing the EC market.

Following some rule changes, demand for the public-private housing hybrid form has softened, resulting in an increase in unsold units.

JLL national director Ong Teck Hui observed: "The number of uncompleted EC units with pre-requisites for sale that have been launched but are unsold has increased from 739 in Q214 to 2,232 in Q215. There are also some 4,800 EC units that are in the launch pipeline."

Some observers such as SLP's Nicholas Mak and CBRE's Desmond Sim suggested that the strong turnout for a not-so-well-located site - it is 1.8km (road distance) from Choa Chu Kang MRT Station - could be due to an expected increase in the income ceiling for eligible buyers of new ECs to be announced soon by the authorities. An increase in the monthly household income ceiling, currently set at S$12,000, could boost demand for ECs.

The top bid at Tuesday's tender closing was substantially lower than the price paid for other EC sites in Choa Chu Kang recently.

The last EC site to be sold in the area was in a much more choice location, along Choa Chu Kang Drive, next to the completed The Rainforest EC and about 600 metres from Choa Chu Kang MRT Station. It fetched a winning bid of S$361 psf ppr from Sim Lian Land at a tender in September last year.

The group is planning a 538-unit project, expected to be launched early next year.

In February last year, MCL Land bought two adjacent sites along Choa Chu Kang Grove/Choa Chu Kang Way, about 1.5km from Choa Chu Kang MRT Station, for S$375 psf ppr and S$339 psf ppr - translating to an average price of S$357 psf ppr.

MCL Land will develop the combined site into the 1,327-unit Sol Acres EC. For the 707 units being marketed under the first phase of the project's launch, nearly 800 e-applications have been received. Sales bookings will begin on Aug 22.

The project is a stone's throw from two LRT stations that lead to Choa Chu Kang MRT Station as well as the future Bukit Panjang MRT Station. Moreover Sol Acres will offer a big range of facilities catering to families - including three swimming pools, three club houses and two tennis courts.

Talk in the market is that Sol Acres will be priced a shade below S$800 psf on average.

As for the latest site tendered at Choa Chu Kang Avenue 5, ERA Realty key executive officer Eugene Lim said that given the much lower land price for the site at Tuesday's tender, the new development "could well be designed with affordability in mind, possibly with a selling price of below S$800 psf".

Market watchers estimate the Qingjian consortium's breakeven cost at around S$700 psf taking into account that Qingjian will probably be doing the construction as well.

For this tender, Qingjian Realty teamed up with Suntec Property Ventures, which is controlled by shipping magnate Frank Tsao; and Bohai Investments. The latter, like Qingjian Realty, is part of Qingjian South Pacific Group.

This will be Qingjian's seventh EC project in Singapore and the group expects to launch it towards late-2016 or early-2017, said Li Jun, general manager at Qingjian Realty.

"We will incorporate smart living features in this project, including our recently launched HiLife mobile applications," he added.

[reporter2]

http://www.straitstimes.com/business...rprise-11-bids

Choa Chu Kang EC site attracts surprise 11 bids

Last weekend, buyers snapped up 185 units at the launch of The Brownstone, a 638-unit EC in Sembawang, the most sold at an EC launch this year.

Jul 29, 2015

Rennie Whang


An executive condominium (EC) site in Choa Chu Kang deemed "mediocre" by experts has attracted more bids than expected from developers - though the sums they offered were relatively modest.

The 1.64ha Choa Chu Kang Avenue 5 site had drawn 11 bids by the time the tender closed yesterday - the highest number of bids for an EC site since February last year. The site can host 490 homes.

A joint venture of Qingjian Realty, Suntec Property Ventures - a Suntec Investment unit - and Qingjian's investment arm Bohai Investments (Sengkang) put in the top bid of $156.157 million, or $295.12 per sq ft per plot ratio (psf pr).

This was about 6.6 per cent above the second-highest bid of $275.71 psf pr from TID Residential, a joint venture between Hong Leong Holdings and Mitsui Fudosan.

The surprising number of bids came as fewer EC sites have been released recently, experts said.

The site was the sole EC offering in the Government Land Sales (GLS) programme for the first half of the year. Just one EC site is being offered in the second half GLS programme - a far cry from the second half of 2012, when six EC sites were made available, said Mr Ong Teck Hui, JLL national research director.

The muted top bid was in line with tenders this year.

An Anchorvale Crescent EC site went for $280 psf pr in February, and a Woodlands Avenue 12 EC site for $278 psf pr later that month, marking the lowest EC land prices since July 2011.

The EC market is grappling with rising unsold supply. The number of launched but unsold units with pre-requisites for sale was 2,232 in the second quarter, up from 2,129 in the first quarter, and 2,028 in the fourth quarter of last year.

The EC vacancy rate was 14.1 per cent in the second quarter, representing 2,391 vacant units - though this was down from 15.1 per cent in the first quarter.

Qingjian Realty (South Pacific) Group general manager Li Jun said the firm has confidence in the EC market, noting: "There have been some signs of healthy take-up."

Last weekend, buyers snapped up 185 units at the launch of The Brownstone, a 638-unit EC in Sembawang, the highest number for an EC launch this year.

With the lower bid prices, developers participating in the tender were likely looking to price the project more competitively, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia.

MCL Land paid $375 psf pr and $338.90 psf pr for two adjacent EC plots in Choa Chu Kang Grove in March last year, which it has combined into the upcoming Sol Acres.

In September, Sim Lian Land paid about $361.10 psf pr for an EC plot in Choa Chu Kang Drive. However, the two plots are closer to the Choa Chu Kang MRT Station.

The eventual selling price for the latest site could be below $800 psf, suggested Mr Eugene Lim, ERA Realty's key executive officer.

At least seven EC projects are yet to be launched, but some developers may feel supply will have eased by the time a project is launched, more than 15 months from now, said Mr Nicholas Mak, SLP International executive director.

The expected rise in the eligibility income ceiling to be announced by the Government soon could be another factor behind the strong interest, he added. "If (it) were to raise the monthly income ceiling for eligible EC buyers from the current $12,000, it could increase the demand for ECs."

Qingjian's Mr Li said it may incorporate some features from recent projects for the latest site. These include smart living technology.