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Thread: Another reserve list site triggered for release

  1. #1
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    Default Another reserve list site triggered for release,00.html?

    Published August 25, 2009

    Another reserve list site triggered for release

    Developer has undertaken to bid at least $200 psf ppr for Serangoon condo site


    (SINGAPORE) For the fourth time in about a month, a 99-year leasehold site on the government's reserve list has been triggered for release, as developers seek to replenish their landbanks with suburban condo land after the run-up in home sales.

    Market watchers expect more successful applications from developers for the launch of reserve-list sites in the coming months. The latest plot is attractively located at Serangoon Ave 3. It is right next to Lorong Chuan MRT Station and not far off from the Australian International School.

    A developer, not named so far, has undertaken to bid at least $83.7 million or about $200 per square foot per plot ratio (psf ppr) for the site, which consultants say can be developed into a condominium with about 300-370 units, depending on units sizes and mix.

    Consultants polled by BT generally expect top bids for the plum site to be in the $350-450 psf ppr range, with resulting breakeven costs of about $700-850 psf and target selling prices of $800-1,100 psf on average.

    DTZ's head of SE Asia research Chua Chor Hoon notes that units in the Goldenhill Park Condo and Amaranda Gardens nearby have transacted at about $810 psf to $950 psf in the past three months. She projects top bids of about $370-450 psf ppr for the latest plot and reckons that the bidders could be eyeing average selling prices of $1,000 to $1,100 psf when the project on the site is ready for launch in about a year.

    Urban Redevelopment Authority will launch the tender for the site in about two weeks. Competition will be hot, with more than 10 bids expected.

    Last week, the tender for a condo plot at Chestnut Avenue - less attractively located than the latest land parcel - pulled 13 bids and a much-higher-than-expected top bid of $280 psf ppr by a City Developments and Hong Realty tie-up. The two other reserve list sites triggered recently and whose tenders have yet to close are a condo site at Dakota Crescent and a commercial and residential plot at the corner of Yio Chu Kang and Seletar roads.

    Knight Frank executive director (residential) Peter Ow says a condo on the latest plot next to Lorong Chuan MRT will appeal to investors looking to rent out apartments to Australian expat families, given the site's proximity to the Australian International School.

    'There's also a good base of demand from HDB upgraders in the Serangoon and Ang Mo Kio vicinities. In addition, some of those living in the surrounding landed estates may be keen to buy a condo unit for their children or as investment,' he adds. Mr Ow expects the highest bids for the land parcel to be about $350-$450 psf ppr, reflecting a breakeven cost of $700-850 psf.

    A condo on the plot will be just one station away from Serangoon MRT, where the 'nex' mall is coming up. 'The site is in an established housing estate, with both landed homes and condos, and is also near neighbourhood schools,' observed Ngee Ann Polytechnic real estate lecturer Nicholas Mak. His projection of top bids at $240-315 psf ppr, however, was the lowest of the four property market watchers polled by BT yesterday.

    Colliers International executive director (investment sales) Ho Eng Joo, who forecasts top bids in the $350-400 psf ppr band, expects developers to trigger more sites for launch from the reserve list.

    The government will release a site in this list for tender only upon successful application by a developer that undertakes to offer a minimum price that is acceptable to the state. Still available on the reserve list are sites that can yield condos near Bishan, Bartley and Bedok MRT stations. Also on offer are plots in places like Yishun, Tampines, Upper Thomson, Jalan Jurong Kechil and Upper Changi Road North.

    While developers did not buy residential land last year during the global financial crisis when home sales dried up and funding was tight, they enjoyed a sudden, strong run-up in homes sales between February and July that has left even many developers surprised.

    This has had the effect of shrinking the supply pipeline of mass-market homes, especially those on 99-year leasehold sites bought at state tenders. This has tempted developers generally to raise prices across various tiers of the market. However, lately some buyers have started to respond by withdrawing to the sidelines again either because they are priced out or they feel prices are starting to run away again.

    A good gauge of affordability and resistance levels will emerge later this week when NTUC Choice Homes previews its 590-unit Trevista condo in Toa Payoh.

  2. #2
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    Default Serangoon site gets $83.7m bid

    August 25, 2009 Tuesday

    Serangoon site gets $83.7m bid

    It is fourth residential plot triggered for sale since last month

    By Joyce Teo

    ANOTHER suburban residential site on the Government's reserve list has been triggered for sale, signalling rising developer confidence.

    Yesterday, an unnamed developer put in the minimum acceptable bid of $83.7 million, or some $200 per sq ft (psf), for a 1.39ha site in Serangoon Avenue 3.

    Property consultants expect to see tender bids coming in at much higher levels because the site is in an established residential area near an MRT station. The 99-year leasehold site is near Lorong Chuan station - one of the first five stations to open on the Circle Line - as well as the Australian International School.

    It has a maximum gross floor area of 38,857 sq m, according to the Urban Redevelopment Authority, and can accommodate an estimated 370 housing units.

    Nearby condominiums include Chiltern Park, Chuan Park and The Springbloom.

    Colliers International director of investment sales Ho Eng Joo expects to see about 10 developers bidding for the site.

    'Sentiment is very strong and there are no sizeable private sites available for en bloc sales. Developers are thus going for the government sites as they need to replenish their land banks.'

    Strong demand at recent suburban launches has shrunk the pipeline of such condos, Mr Ho added.

    Cushman & Wakefield managing director Donald Han said developers are now in a more buoyant mood and looking to replenish their land banks.

    'We have been seeing site after site being triggered since July; it shows that the reserve list is working and helping to provide a steady stream of supply.'

    Bids for the Serangoon Avenue 3 plot are likely to range from $100 million, or $240 psf per plot ratio (ppr), to $132 million, or $315 psf ppr, predicted property consultant Nicholas Mak, who is expecting between five and 12 bidders.

    Mr Han and Mr Ho are more bullish about price and are expecting bids to come in at as high as $350 psf and $400 psf respectively.

    With such bids, break-even levels may range from $600 to $700 psf, and the successful developer could be looking to sell the new units at $750 to $850 psf each.

    The Serangoon Avenue 3 site - the fourth plot for residential use triggered for sale since last month - was made available for sale via the reserve list system.

    Under this sale method, a site goes up for tender only if developers indicate interest by committing to a minimum bid.

    Last week, a tender for a suburban condo plot in Chestnut Avenue attracted an impressive 13 bids of which the highest was at $280 psf of gross floor area.

    The response was stronger than expected given that the site is located at quite a distance from the nearest LRT station.

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