CDL unit puts in highest bid for Sengkang site

A UNIT of City Developments (CDL) lodged the highest bid for a Sengkang site in a hotly contested tender that attracted some of the biggest names in property development.

Sunmaster Holdings trumped its nine rival bidders with an offer of $200.5 million, or $365.26 per square foot (psf) of potential gross floor area, for the 182,986 sq ft plot.

This was 185 per cent above the reserve price of $70 million or $128 psf, said Mr Li Hiaw Ho, executive director at CB Richard Ellis Research.

The Sunmaster Holdings bid for the 99-year leasehold residential site at the corner of Sengkang West Avenue and Fernvale Link was followed by Tuas Hi-Tech Park’s offer of $177 million.

Frasers Centrepoint was just $92,000 behind at $176,908,000.

Other bidders included a joint venture between Hoi Hup Realty and Sunway Developments, First Changi Development, Allgreen Properties, CEL Development and Lippo Estates, with the lowest bid at $115.6 million.

‘The healthy number of bids received shows that developers remain confident of the market for mass-market homes,’ said the director of research and advisory at Colliers International, Ms Tay Huey Ying.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak pointed out that although developers ‘are still somewhat hungry for good development sites’, most bids were reasonable.

This is possibly because of the ample supply of government land sales projects coming up in the first half of the year, he said.

The site is estimated to be able to accommodate up to 465 condominium units and has a maximum allowable gross floor area of 50,996 sq m or 548,916 sq ft. It is near the Layar LRT station on Sengkang West Avenue.

Based on breakeven estimates of $650-$700 psf, Mr Li expects selling prices at the new development to range from $750 to $800 psf.

Units at another condominium in the vicinity, the Quartz, had been transacting at prices averaging $745 psf since last October, Ms Tay said.

With five-room and executive resale HDB flats in Sengkang selling for $400,000 to $500,000, Mr Li believes that there should be demand from HDB upgraders whose flats have or will soon turn five years old.

Demand could also come from the nearby Seletar private estate, he said.

The Housing Board will award the tender within the next two weeks.

Source: Straits Times, 5 Feb 2010