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Thread: Far East tops tender with bid 35% clear of field

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    Default Far East tops tender with bid 35% clear of field

    http://www.businesstimes.com.sg/sub/...50719,00.html?

    Published September 18, 2009

    Far East tops tender with bid 35% clear of field

    It plans Holland V-type shophouses, 150-200 apartments

    By KALPANA RASHIWALA


    (SINGAPORE) The tender for a residential and commercial plot at the corner of Yio Chu Kang and Seletar roads yesterday drew 12 bids, with Far East Organization topping the list with an offer that outshone its closest competitor by a huge 35 per cent - possibly the widest margin at a state tender in recent years.

    Far East's offer of $119.08 million works out to $376 per square foot of potential gross floor area - much higher than market expectations.

    The second-highest bid, by a Centurion Properties unit, was $88.19 million or $279 psf per plot ratio (psf ppr).

    Sim Lian, Soilbuild Group and Frasers Centrepoint bid in the $247 to $253 psf ppr range.

    Four others also bid above $200 psf ppr - Ho Bee; Roxy-Pacific unit Mequity; JBE Development, which is controlled by Hongkonger Patrick Lam who developed The Luxe in Handy Road; and Heeton. Wah Khiaw Developments bid about $200 psf ppr.

    'The strong turnout shows developers are still hungry for land,' said a developer who took part in yesterday's tender. 'Second, the relatively small outlay also boosted the participation rate.'

    While National Development Minister Mah Bow Tan announced this week that the government would resume land sales under the confirmed list in the first half of next year, it makes sense for developers to clinch sites now and launch ahead of the competition, according to Credo Real Estate managing director Karamjit Singh.

    Mr Singh estimates that a new low-rise condo on the Seletar/Yio Chu Kang roads site could fetch an average price of $750-780 psf in today's market.

    'There's very little supply of new condos in the location. The area also has a wide catchment of landed property owners whose buying power would be higher than the typical HDB upgrader's.'

    The 2.1-hectare, 99- year leasehold site can be built up to five storeys.

    BT understands that Far East could manage a breakeven cost for the project's residential component of about $600 psf, despite its bullish bid.

    'It apportioned a much higher land value for the project's commercial component - which can form up to around 15 per cent of the project's maximum gross floor area - than its residential component,' an analyst said.

    Chng Kiong Huat, Far East Organization executive director (planning and development), said that the group's scheme includes 150-200 apartments, comprising two and three-bedroom units.

    'The project should be launch-ready in the second half of next year,' he said.

    For the commercial component, Far East is looking at developing a modern shophouse cluster in the style of Holland Village.

    'There will be a supermarket or neighbourhood centre type of food market, as well as restaurants, pubs and wine bars,' Mr Chng said. 'We'll retain the commercial component as an investment property for rental income.'

    Market watchers point out that Far East is no stranger to the location, having developed more than a dozen projects in the Yio Chu Kang/Hougang vicinity over the past 20 years. These include Bullion Park, Florida Park, Banyan Villas, Regentville, Gerald Park and Central Place.

    In a Sept 16 report, UBS Investment Research said that it expects the government to provide land for 3,000-3,500 private homes, including executive condos, in the first-half 2010 confirmed list - close to the level in H2 2007.

    For the whole of 2010, UBS reckons that 'it is reasonable for the government to release 4,000-5,000 units on the confirmed list'.

    'But if prices continue to rise sharply in H1 2010, more units could be included in the confirmed list for H2 2010,' said the report, which was written by analysts Regina Lim and Michael Lim.


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    http://www.straitstimes.com/Money/St...ry_431364.html

    Sep 18, 2009 Friday

    Far East offers $119m for Seletar site

    Huge tender sets firm apart from rivals; it pays 35% more than next bid

    By Joyce Teo, Property Correspondent


    THE first land tender exercise since the Government announced measures to calm the property market closed yesterday with a bullish top bid well out of sync with the other leading offers.

    Far East Organization lodged a bid of $119.08 million for the mainly residential site at the corner of Yio Chu Kang Road and Seletar Road.

    This was 35 per cent higher than the second bid and nearly 2-1/2 times higher than the lowest offer of $48.8 million.

    The site is on the reserve list, which means that it was put up for tender only after a developer triggered its sale by committing to a minimum acceptable bid.

    There were 12 bidders in all - more than expected - including high-profile developers such as Frasers Centrepoint, Sim Lian Land and Ho Bee Investment.

    The Far East bid, which works out at $376.29 per sq ft (psf) of gross floor area, was 'surprisingly bullish' as the site is in a sleepy area that is not near an MRT station, said property consultant Nicholas Mak, a Ngee Ann Polytechnic lecturer.

    The 99-year leasehold site also has a height restriction of five storeys.

    About 85 per cent of the site's maximum gross floor area of 29,400 sq m is slated for residential use. The remaining space is for shops.

    Apart from the Far East's knock-out bid, the other leading candidates - mostly developers aiming to top up land banks - tendered offers in a narrow band.

    Their bids were within earlier expectations of $250 psf to $300 psf per plot ratio, which would fit a final selling price of completed flats at $700 psf to $750 psf.

    'The second to the fifth bids came in quite close and are more reflective of the market,' said a property consultant who declined to be named.

    'These developers would have taken into account the Government's measures as the confirmed list will add to the supply in the market.'

    The Government announced on Monday that it will reinstate the confirmed list of sale sites and remove the interest absorption scheme, among other smaller measures, to 'temper the exuberance in the market and pre-empt any speculative bubble from forming'.

    Under the confirmed list, sites are put out for sale according to a pre-determined schedule, regardless of developers' interest.

    An industry source said that developers will understandably become more cautious, particularly as the Government has yet to disclose the number of sites that will be on the confirmed list.

    But Mr Mak said Far East is clearly banking on a continued rise in private home prices.

    He estimated that the site can yield 220 to 240 housing units. These units, experts predict, will likely have to sell for around $850 psf to $900 psf.

    The nearest condominium in the area, Seletar Springs, is going for around $500 psf, said Mr Mak. Caveats lodged in July and last month ranged from $487 psf to $563 psf.

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    Quote Originally Posted by mr funny
    BT understands that Far East could manage a breakeven cost for the project's residential component of about $600 psf, despite its bullish bid.

    The nearest condominium in the area, Seletar Springs, is going for around $500 psf, said Mr Mak. Caveats lodged in July and last month ranged from $487 psf to $563 psf.
    This Far East is so gung ho!

    Nearby condominiums are selling for around $500 psf, they can bid at a breakeven cost of $600 psf!

    We need more developers like Far East!

    I guess next time they will again launch it at $1,000 psf (seems like every condo nowadays are launched at $1,000 psf) and then there will be a long queue of people, like at Centro.

    I like Far East's "take it or leave it" attitude - cannot finish selling just carry the properties in their books till eternity ... and then Forbes will value them at US$8 billion.

    I recently re-valued my networth using this "Far East" method, and found that my networth suddenly increased by $1 m !

    Feels really good ...

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    Quote Originally Posted by jlrx
    This Far East is so gung ho!

    Nearby condominiums are selling for around $500 psf, they can bid at a breakeven cost of $600 psf!

    We need more developers like Far East!

    I guess next time they will again launch it at $1,000 psf (seems like every condo nowadays are launched at $1,000 psf) and then there will be a long queue of people, like at Centro.

    I like Far East's "take it or leave it" attitude - cannot finish selling just carry the properties in their books till eternity ... and then Forbes will value them at US$8 billion.

    I recently re-valued my networth using this "Far East" method, and found that my networth suddenly increased by $1 m !

    Feels really good ...
    Soon you can't see 9xxpsf adver anyone in papers

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    such price does say a thing abt property mkts prices in time to come....property can only become MORE AND MORE EXPENSIVE...

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    Btw I was wondering, since FEO so rich. Why they are so despo to bid at so high?

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    Quote Originally Posted by Property_Owner
    Btw I was wondering, since FEO so rich. Why they are so despo to bid at so high?
    Cos they probably know where the market is going.

    And that is why FEO is rich. If they are listed, I would hv bought their shares.

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    Quote Originally Posted by Property_Owner
    Btw I was wondering, since FEO so rich. Why they are so despo to bid at so high?
    Follow the richest man in Singapore, u can't be too far wrong

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    Quote Originally Posted by xtink
    such price does say a thing abt property mkts prices in time to come....property can only become MORE AND MORE EXPENSIVE...
    If FEO is the one to decide to future prices for property market with their price they tender, then I better buy now....

    Worry one day they decided to bid $2,000psf for woodlands area then I will never be able to afford.

    Very good price now.....BUY BUY BUY before too late....

    CHIONG AH....................................SINGAPOREAN

    BUY AH.........................................SINGAPOREAN

    FAST AH........................................SINGAPOREAN

    HUAT AH........................................SINGAPOREAN

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    Quote Originally Posted by Property_Owner
    Btw I was wondering, since FEO so rich. Why they are so despo to bid at so high?
    Probably the amount involved is so small that it doesn't really make a difference either way.

    The boss of Far East is worth US$8 billion (SGD 11.32 billiion) while the entire amount involved is just $119 million, equivalent to 1% of his networth.

    Assuming he makes a 30% return from this development, that's just $30 million or 0.3% of his networth.

    That's like making $3,000 for an average person with a networth of $1 million.

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