Published August 20, 2008

Hoi Hup-led group top bidder for DBSS site in Toa Payoh

Its bid of about $198.82m works out to about $160 per sq ft per plot ratio


A CONSORTIUM led by Hoi Hup Realty has emerged as the top bidder for a Housing & Development Board Design, Build and Sell Scheme (DBSS) site at Lorong 1A Toa Payoh.

Its bid of about $198.82 million works out to about $160 per square foot per plot ratio (psf ppr). Market watchers estimate that the breakeven cost could be around $430-500 psf of saleable area.

The breakeven cost will depend not just on construction costs but also whether Hoi Hup succeeds in making its formal application to the Urban Redevelopment Authority in time to secure provisional permission before Oct 7.

After that date, bay windows and planter boxes will no longer be exempt from Gross Floor Area calculations, industry players noted. If Hoi Hup manages to get the exemption, its breakeven cost will be lower.

ERA Asia-Pacific associate director Eugene Lim reckons the selling price for the new HDB flats Hoi Hup can build on the site may be around $550 psf of saleable area.

Currently, in the HDB resale market, four-room flats (90 sq metres or 969 sq ft) are selling for about $540 psf while five-room flats (110 sq m or 1,184 sq ft) are selling for about $530 psf in the location, Mr Lim added.

'As far as pricing is concerned, the threshold for HDB buyers of flats in Toa Payoh should not exceed $650,000 for five-room flats and $550,000 for four-room flats,' according to Mr Lim.

He also commented that the top bid at yesterday's tender was bullish - he had been expecting about $130 psf ppr - considering that it came from Hoi Hup, which is also developing City View @ Boon Keng DBSS flats.

These were launched earlier this year at an average of $520 psf. More than 80 per cent of the total 714 units have been sold so far.

The DBSS site at Lor 1A Toa Payoh, which is being offered on a 103-year leasehold tenure, can accommodate about 1,200 HDB flats comprising a mix of three-, four- and five-room flats, analysts estimate.

The consortium that entered the top bid at yesterday's tender also includes Sunway Developments and Hoi Hup JV Development (whose shareholders include Straits Construction and Hoi Hup Realty).

The tender attracted two other bids - from TP Development Pte Ltd (a joint venture between Chip Eng Seng and AIG) which bid about $160.3 million or $129 psf ppr and Sim Lian Land ($130 million or $104.64 psf ppr).