$405psf ppr offer is among 16 bids for plot near Kovan MRT Station
FRAGRANCE Properties has placed the highest bid of $16.25 million or about $405 per square foot of potential gross floor area at a state tender yesterday for a private residential plot along Tampines Road near the junction with Hougang Ave 3.
The tender for the 99-year leasehold plot drew a total of 16 bids.
The 28,656 sq ft plot, which is near landed homes, is about 700 metres from Kovan MRT Station. It can be developed into apartments or landed homes. Fragrance Group boss Koh Wee Meng told BT that the group's preference is to develop apartments on the site. 'Most probably the site might be able to accommodate 50 apartments, with a swimming pool and other facilities. We intend to launch the project towards the end of the year,' he added.
Market watchers reckon that for a developer to squeeze in 50 apartments, the average unit size would be about 780 sq ft.
Credo Real Estate managing director Karamjit Singh estimates Fragrance's breakeven cost could be in the low-$700 psf range.
Another property consultant observed that apartments and condos in the location have changed hands at $754-1,227 psf this year.
Fragrance has been on a land buying spree for the past year or so. Last month, it clinched Culford Gardens in Siglap through a collective sale for $39 million or $632 psf per plot ratio (psf ppr). Its acquisitions last year included Premier Centre, an office block at Beach Road, development land at Telok Kurau, a site in Changi Road and a row of shophouses at Pasir Panjang.
Those who bid at yesterday's state tender at Tampines Road comprised mostly smaller developers, construction companies and other contractors. However, there was at least one notable exception.
OPH Marymount Limited - a subsidiary of listed Orchard Parade Holdings, which in turn is part of the Far East Organization stable - placed the third highest bid of almost $15 million or $374 psf ppr.
The second highest bid, of $15.5 million or $386 psf ppr, came from Whye Wah Group, which is involved in the furniture-making and upholstery business as well as building construction.
Other bidders include Ningbo Construction Group (S) and JBE Holdings (whose directors include boutique developer Patrick Lam Kong Yin).
The lowest bid, from Kim Hoe Corporation, was $7.5 million or about $187 psf ppr. This was about 15 per cent above the minimum offer price of $6.5 million or $162 psf ppr indicated by the state for the site, which was triggered from the reserve list.
'Government land tenders have been attracting many more bids than private tenders due to low reserve prices and transparency of the reserve price, at least for reserve list sites, where the minimum price is made public. This has been enticing both opportunistic bidders as well as serious developers,' says Mr Singh.
The spread of bids reflects developers' different readings of the market and landbank situations, he added.
Earlier this week, another state tender for a 99-year condo site next to Lakeside MRT Station and near Jurong Lake drew 14 bids, ranging from CapitaLand's $273 psf ppr to Keppel Land's $499 psf ppr.
That site was awarded yesterday to KepLand, which said it plans to develop a condo with about 550 units of sizes ranging from 500 sq ft to 1,400 sq ft on the site.
The units will be in one-bedroom to four-bedroom configurations as well as penthouses. 'Presently in the design and development stage, the project is expected to be launch ready by end-2010 and completed in end-2013,' KepLand said in its release.
Source: Business Times, 7 May 2010
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