700 new flats in Yishun likely

Top bidder promises mostly 3- and 4-room units if awarded contract

THE top bidder in a tender for a premium public housing site in Yishun said yesterday it would build 700 flats there, mainly three-room and four-room units, if it is awarded the contract.

A joint venture between Guthrie (DBP) and SK Land emerged as the top bidder with an offer of $148.89 million or $179.80 per sq ft (psf) of gross floor area.

The tender, under the Housing Board's (HDB) Design, Build and Sell Scheme, had attracted six bidders when the tender closed yesterday.

The scheme allows private developers to design, build and sell HDB flats directly to buyers. The last one was The Peak at Toa Payoh, released in April last year.

Yesterday's top bid was within analysts' expectations of $132 million to $166 million, or $160 psf to $200 psf of gross floor area.

The offer was about 5 per cent above the second highest bid from a consortium of Hoi Hup Realty, Sunway Developments and Hoi Hup J.V. Development. It had put in a bid of $142.3 million or $171.85 psf of gross floor area.

Other bidders included Sim Lian Land and Chip Eng Seng's CEL Development.

The Yishun plot, which has a maximum allowable gross floor area of 76,926 sq m, is at the junction of Yishun Avenue 11 and Yishun Central.

The top offer could translate to a break-even level of at least $400 psf, said ERA Asia-Pacific associate director Eugene Lim.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak is projecting a lower break-even level of $360 psf to $400 psf.

The final selling price could start from about $300,000 for a three-room flat, $400,000 to $500,000 for a four-room flat, and $480,000 to $600,000 for a five-room unit, property experts said.

On a psf basis, prices could average $450 to $470, they said.

Nearby, four-room flats that are more than 10 years old are going for about $350,000 to $360,000 in the resale market, said Mr Lim.

Said Mr Michael Leong, managing director of Guthrie Properties, which owns the bigger share in the top-bidding joint venture: 'We are entering a rather challenging but relatively safe market segment as we are targeting first-timers and upgraders.'

SK Land is related to Santarli Construction, a contractor with experience in building HDB flats.

HDB said it will evaluate the tender bids and announce the tender results within a fortnight.

Source: Straits Times, 19 May 2010