Wednesday, April 28, 2010

Changi site draws top bids at lower end of estimates

THE tender for a 99-year leasehold residential site at Upper Changi Road North/Flora Drive closed yesterday on a more subdued note than other recent tenders.

The 3.07 hectare site, which can yield up to 390 apartments, drew bids from six developers. Hong Leong Group unit Tripartite Developers made the top offer of $148.3 million or $321 per sq ft per plot ratio (psf ppr).

A tie-up between units of Far East Organization and Orchard Parade Holdings followed close behind, with a bid of $143.2 million or $310 psf ppr.

Frasers Centrepoint was in third place with a bid of $140 million or $303 psf ppr. Sim Lian, Ho Bee and BBR-Tagore also took part in the tender.

The top bids were towards the lower end of consultants' projections at $300-$400 psf ppr. The site's distance from an MRT station could be a factor in this.

DTZ South-east Asia research head Chua Chor Hoon suggested the large supply of state land may also have dampened competition. With the release of more government land sale sites recently, developers have more choice and could be 'slightly more comfortable', she said.

Last month, the tender for a residential site at Tampines Avenue 1/Ave- nue 10 closed with eight bidders in the fray. Sim Lian made the highest offer of $302 million or $421 psf ppr.

In the latest tender for the Upper Changi Road North site, Hong Leong's top bid is likely to translate to a breakeven cost of $650-$700 psf, said Colliers International investment sales executive director Ho Eng Joo. The selling price could range from $750-$800 psf.

Mr Ho said Hong Leong is familiar with the Pasir Ris area. It is behind seven other projects in the vicinity with names from A to G, such as Edelweiss Park, Ferraria Park and The Gale.

At The Gale - which is a freehold development - units have been sold for $743-$833 psf this month, going by caveats lodged.

Developers hoping for a project in Pasir Ris can turn to another site on the reserve list. The Housing & Development Board has made a 99-year residential plot at the junction of Pasir Ris Drive 3 and Pasir Ris Drive 4 available for application from today.

The site, which is on the reserve list, is about two hectares and can yield an estimated 380 units. It is near Pasir Ris Park and Downtown East, and is surrounded by other parcels of state residential land.

Source: Business Times, 28 Apr 2010

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