MCL Land top bidder for Hougang residential site

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http://www.businesstimes.com.sg/sub/...86915,00.html?

Published May 21, 2010

MCL Land top bidder for Hougang residential site

By UMA SHANKARI


MCL Land trumped six other developers with its top bid of $207.5 million for a 99-year leasehold residential site at Hougang Avenue 2.

The price works out to $456 per square foot per plot ratio (psf ppr) - higher than analysts' estimates of $310-350 psf ppr when the site was first triggered more than a month ago. In fact, all seven bids came in above that estimated range at the close of the state tender yesterday.

'While the number of bids, at seven, are within expectations, the bid prices are fairly bullish,' noted CBRE Research's executive director Li Hiaw Ho.

'The top bid of $207.5 million, or $456 psf ppr, will translate to a breakeven cost of about $780 to $800 psf for a low-rise condominium project. The new project could probably fetch around $900-$950 psf when launched in 2011.'

MCL Land said that if it is awarded the site, it will build a project with around 450-500 units. Most of the units will be one and two-bedroom apartments as well as smaller three-bedders, the company said. The project will be launched in 9-12 months' time.

MCL Land's bid was 10 per cent higher than the second highest bid of $189.3 million, or $416 psf ppr, from Frasers Centrepoint. The top bid was also 21 per cent higher than the lowest bid of $171 million, or $376 psf ppr, put in by Sim Lian Land. Analysts said that MCL Land might have been especially bullish as it is the developer's sixth attempt in a government land sale tender since last year.

'It has been unsuccessful in the previous five land tenders, which may explain why it is more aggressive in this tender, bidding 10 per cent higher than the second highest bidder,' said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

The plot was launched for sale after it was triggered by an unnamed developer who agreed to bid at least $109.9 million ($241 psf ppr) for it in April.

The site is located at the junction of Hougang Avenue 2 and Yio Chu Kang Road and surrounded by mostly landed homes.

CBRE's data showed that units in recently launched new freehold apartment projects in the vicinity such as the 50-unit D'Pavilion, 81-unit Residences Botanique and 33-unit Wembly Residences were sold at average prices of $930 psf, $1,000 psf and $870 psf respectively between January and April 2010. And units in the 99-year leasehold Kovan Residences went for an average of $900 over the same period.

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http://www.straitstimes.com/Money/St...ry_529338.html

May 21, 2010

Top bid for this Hougang site: $207.5m

MCL Land's offer about twice the minimum trigger bid; site attracts six other bids

By Joyce Teo, Property Correspondent


DEVELOPERS have again lodged bids above market expectations for a suburban residential site, this time at Hougang, with a top bid of $207.5 million.

This works out to a bullish $456 per sq ft per plot ratio (psf ppr).

However, the seven bidders competing for the 3.02ha plot in Hougang Avenue 2 were fewer in number than for some recent hotly contested sites.

One recent tender in Simei attracted a sizzling 18 bids.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak noted that developers appear to be rather selective in their choice of sites.

'Only those development sites that are near to MRT stations attract more than 10 bidders,' he said.

The site is about 10 minutes' drive from Hougang and Kovan MRT stations.

When the tender closed yesterday, the top bid for the site was from MCL Land (Serangoon), the Urban Redevelopment Authority (URA) said.

MCL Land's bid is about twice the minimum trigger bid and nearly 10 per cent above Frasers Centrepoint's bid of $189.29 million or $416 psf ppr.

A bid from Far East Organization's units came in third, offering $181.33 million or $398.5 psf ppr, while a CapitaLand unit offered $177 million or $388.98 psf ppr, putting it in the fourth spot.

Sim Lian Land made the lowest bid of $171 million or $375.8 psf ppr - but still above some analysts' expectations. Property experts had predicted bids of as low as $310 psf ppr to as high as $440 psf ppr.

The plot is slated for development into an estimated 385 units in apartment blocks of up to five storeys in height, or landed homes of up to three storeys.

It has a 99-year lease, is located adjacent to Hougang HDB town and is surrounded mostly by landed homes such as Princeton Vale.

The apartment developments in the neighbourhood include Nouvelle Park, Toho Green and the soon-to- be completed Fontaine Parry.

Said CBRE Research executive director Li Hiaw Ho: 'While the number of bids, at seven, was within expectations, the bid prices are fairly bullish.'

He said the top bid will translate to a break-even cost of about $780 to $800 psf for a low-rise condominium project.

The new project could probably fetch about $900 to $950 psf when it is launched next year, he added.

Other experts estimate the break-even cost at up to $820 psf.

Recent launches of freehold apartment projects in the vicinity, like the 50-unit D'Pavilion, the 81-unit Residences Botanique and 33-unit Wembly Residences, were sold at average prices of $930 psf, $1,000 psf and $870 psf respectively from January to April this year, he noted.

A 99-year leasehold project in the area, Kovan Residences, was sold at $900 psf on average in the same period.

Mr Li said the successful bidder could also choose to develop a cluster project of about 200 units on the site.

Mr Mak said the developer is likely to develop mostly non-landed homes, with possibly 15 to 20 strata-landed houses.

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