Friday, March 12, 2010

China SOE unit MCC Land is top bidder for Yishun EC site

MCC Land, part of Chinese state- owned enterprise Metallurgical Corporation of China (MCC Group), has emerged top bidder for an executive condominium site at Yishun Avenue 11.

Its bid of $127.8 million or $281 per square foot per plot ratio (psf ppr) was 7.5 per cent above the next highest offer of $261.68 psf ppr from fellow mainland Chinese group Qingjian Realty.

The tender for the 99-year leasehold plot drew 10 bids, with the lowest bid from SK Land (owned by a Lee Boon Teow) at $103 psf ppr.

If MCC Land is awarded the site, it will mark the MCC Group’s maiden Singapore property development.

MCC Land managing director Tan Zhiyong told BT that the group’s proposed scheme for the site is an eco-friendly project with over 400 units comprising two, three and four-bedroom apartments. The breakeven cost will be in the $500-550 psf region and the plan is to launch the project this year.

Mr Tan would not be drawn on likely selling prices but said: ‘We will keep it affordable, given the buying eligibility criteria for exec condos of a maximum $10,000 monthly household income.’

The developer will not build any shoebox units in the project, he said. ‘We want to follow the Singapore government’s vision for ECs. Let the people have enough room to pro-create and set up a family.’

This is the second time MCC Land has taken part in a Singapore Government Land Sales tender. Its first attempt, a week ago, was the tender for an EC site near Buangkok MRT Station. In that tender, it emerged second-highest bidder, pipped by a tie-up between Frasers Centrepoint and Lum Chang Building Contractors – by 1.4 per cent.

While MCC Land is new to Singapore, the MCC Group’s Singapore construction unit China Jingye Engineering Corporation Ltd (Singapore Branch) has been doing business here for almost 14 years. It is the main contractor for Universal Studios at Resorts World Sentosa.

Mr Tan told BT that if the group is awarded the Yishun EC site, it will ‘definitely explore’ the possibility of handling the project’s construction in-house. ‘But we will consider outside parties to handle the construction if they can do it cheaper. Whatever it is, we will not compromise on quality,’ he said.

‘Looking at the beautiful environment in the location – it is next to parks – we will complement this by using environmentally friendly technology and concepts for our project, such as having solar panels for the general areas and recycling rainwater for non-potable use.’

MCC Land will continue to seek good development land – be it residential, commercial or mixed-use sites – across the island, he said.

MCC Group – with dual listings on the Hong Kong and Shanghai bourses – is involved in engineering, procurement and construction, mining, paper-making, equipment fabrication and property development. It is a Fortune 500 company.

Seven of the total 10 bids in yesterday’s tender exceeded the $150-210 psf ppr that the site was estimated to fetch when it was launched in January by the Housing & Development Board.

But market watchers yesterday were not too surprised by the strong bids, pointing to robust sales recently for the launch of The Estuary, a 99-year leasehold private condo project in a better location in Yishun that fronts Lower Seletar Reservoir and is near Khatib MRT Station.

More than 500 units in The Estuary have been sold at an average price of $758 psf. ‘The developer of the latest EC site in Yishun might be able to achieve an average selling price of about $650 psf,’ said an industry observer.

CB Richard Ellis executive director Li Hiaw Ho said that while the latest EC plot may be less accessible, future residents will nonetheless enjoy a serene environment as it is close to Yishun Park and Orchid Country Club. ‘It’s also a short drive from Northpoint mall and other amenities at Yishun Central,’ he said.

ECs are a hybrid of public and private housing. EC projects have initial eligibility, ownership and resale restrictions similar to public housing, but these are lifted after 10 years.

Other bidders in yesterday’s tender included United Engineers unit Maxdin (about $257 psf ppr), Far East Organization ($256 psf ppr) and JBE Development, controlled by Hongkonger Patrick Lam, who developed The Luxe in Handy Road, at $227 psf ppr.

Source: Business Times, 12 Mar 2010

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