Tuesday, October 27, 2009

Landed housing site on reserve list set for sale

Demand for residential land has spread from the non-landed to the landed sector. For the first time this year, a developer has triggered for sale a government landed housing site, and consultants are expecting to see some competition for the plot.

The 99-year leasehold parcel on Westwood Avenue, Jurong West, is on the government reserve list and has a site area of 14,098.9 square metre. The plot is surrounded by other landed estates such as Westwood Park, The Floravale condominium, and is near the Pan-Island Expressway.

An unnamed developer has committed to bid at least $15 million or $99 per square foot of land area for the site. HDB will launch the tender for the plot in about two weeks. Property consultants expect to see at least five bids for the site.

DTZ head of South-east Asia research Chua Chor Hoon reckons that there would be around 10 bids. ‘There are not many landed homes in the west, and there is demand not just from HDB upgraders, but also from those working nearby in Nanyang Technological University and the industrial estates,’ she says.

Colliers International research and advisory director Tay Huey Ying believes that the site could draw around 5-8 bids – some from newcomers – because not many ‘mass-market landed sites’ have been available in the market.

Savills Singapore research & consultancy senior manager Christine Sun adds that the upcoming development of Jurong Lake District could lead to more commercial activities and employment in the area, translating to greater housing demand and possibly higher rental yields.

Wide-ranging estimates have been made for the winning bid. DTZ foresees that the site can house mainly terrace houses – about 50-55 of them – and the top bid could reach $25-30 million, or $165-200 psf of land area.

This, in turn, would lead to a breakeven cost of $295-330 psf. Each unit may eventually be sold for $1.1-1.2 million, or $580-680 psf.

Savills believes that the site would be able to hold around 60 terrace units. Indicative bids would range from $16.7 million to $21.2 million, or around $110-140 psf of land area. The sale price of each unit could come up to around $1-1.1 million.

Going by caveats lodged in July and August, terrace houses at the adjacent Westwood Park changed hands at $454-510 psf, or $850,000 to $1.13 million.

The land parcel on Westwood Avenue was previously on the Confirmed List and had been put out for tender in January last year. The government did not award the tender as the two bids tendered – $11.8 million and $10.33 million – were considered too low.

Source: Business Times, 27 Oct 2009

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