Far East, Frasers Centrepoint put in top bid for Yishun site

Duo's joint bid is 17% above the only other offer from GuocoLand for the condo plot

FAR East Organization and Frasers Centrepoint jointly submitted the higher of two bids for a condo site at Yishun at the close of a state tender yesterday.

The two developers bid $229.4 million, or $321 per sq ft (psf) of gross floor area, for the 99-year leasehold plot at the junction of Yishun Ave 2, Yishun Ave 7 and Canberra Drive.

Their bid was 17 per cent higher than the only other offer, which was from GuocoLand. GuocoLand offered $196 million or $274 psf of gross floor area.

Far East Organization and Frasers Centrepoint plan to build a 660-unit project on the site. The average size of the units will be about 1,000 sq ft, said a Frasers spokeswoman.

Analysts said the low level of interest in the site - just two bids - was one of the weakest responses to a state land tender in recent times. 'The site received a muted response probably because of its larger size,' said Leonard Tay, director of CBRE Research.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said developers may have been deterred by the large potential supply of new residential units due to come up in in Yishun and Sembawang.

Competition from this large supply means new projects will take longer to sell, Mr Mak said.

Upcoming supply in the area includes HDB flats - executive condominium units and flats under the design, build and sell scheme - and private condos that will go up on three sites sold by the government so far this year.

The latest site is not near Yishun station or many amenities, Mr Mak said: 'Therefore, the new project on this site may not be as popular with home-buyers, compared with other developments.'

Developers could also be conserving resources for state sites to be released in the second half of this year, analysts said.

The new Yishun project could break even around $600 psf and units could sell for $650 psf or higher, they said.

Data from CBRE Research shows that units in The Estuary were transacted at between $660 and $800 psf in March and April.

And in the resale market, units in adjacent Yishun Emerald and Yishun Sapphire went for $540-$630 psf from February to May.

Source: Business Times, 19 Jun 2010