Tuesday, April 20, 2010

Upper Serangoon, Hougang sites up for public tender

Bids seen coming in at up to $560 psf ppr and $350 psf ppr respectively

TWO more 99-year leasehold residential plots were launched for sale by the government yesterday – one at Upper Serangoon Road from the confirmed list and the other at Hougang Avenue 2 from the reserve list.

The Hougang Avenue 2 site was triggered by a developer who agreed to bid at least $109.9 million for it, which works out to $241 per square foot per plot ratio (psf ppr), the Urban Redevelopment Authority said on April 7.

Analysts said then that the top bid for the site could come in at $310-350 psf ppr once the tender is launched.

The second site, between Upper Serangoon Road and Pheng Geck Avenue, is being launched in line with the schedule announced for the first-half 2010 government land sales (GLS) programme.

The site has a maximum gross floor area of 187,313 sq ft. Analysts say that it could fetch $450-560 psf ppr, which works out to a land cost of $84-105 million.

The site can be developed into a part low-rise (up to five-storeys) and part mid-rise (around 18 storeys) condominium comprising at least 150 units, said Li Hiaw Ho, executive director of CBRE Research.

‘It will be popular with home buyers and developers because of its location and proximity to an MRT station,’ Mr Li said. ‘As developers are still interested in acquiring sites, we expect it to be able to attract about 10 bids.’

Chua Chor Hoon, head of DTZ’s South-east Asia research team, said: ‘The successful tenderer is likely to build mainly small units on the site to capitalise on its proximity to the MRT. Investors would be attracted to buy them for leasing.’

Recent sub-sales at 28 Woodsville and 8@Woodleigh ranged from $884 psf to $905 psf, she said.

Eight major GLS residential sites, including an executive condominium site, will be sold between now and June 2010. In addition, two tenders set to be launched soon could close by end-June.

Analysts say that this is the highest concentration of GLS development land parcels in different locations offered for sale within a four-month period since the reserve list system was introduced in 2001.

‘The jury is still out on whether these 10 land tenders can continue to attract bullish bids or whether developers experience fatigue,’ said Ngee Ann Polytechnic real estate lecturer Nicholas Mak. ‘If the highest bids in subsequent tenders display a declining pattern, the government may have achieved the first step towards moderating private home prices by using supply-side measures.’

The tender for the Hougang Avenue 2 site closes on May 20, while that for the Upper Serangoon Road/Pheng Geck Avenue plot closes on June 2.

Source: Business Times, 20 Apr 2010

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