8 bids for condo plot at Punggol Field Walk

Business Times: Fri, Sep 02
A CONDOMINIUM housing plot at Punggol Field Walk drew a higher than expected eight bids at the close of the state tender yesterday. But analysts said that despite the good participation, the bid amounts signal developers’ caution. The top bid of $1…

A CONDOMINIUM housing plot at Punggol Field Walk drew a higher than expected eight bids at the close of the state tender yesterday.

But analysts said that despite the good participation, the bid amounts signal developers’ caution.

The top bid of $169.6 million or $323 per square foot per plot ratio (psf ppr) for the 99-year leasehold site came from Capital Development and ZACD Investments. Both companies are owned by individual shareholders.

Bidding was tight and the top four bids were in close range, with a tender bid price gap of just 6 per cent between the top and fourth highest bids.

The tender for the site, which can yield about 550 units, was launched on June 29. Then, analysts estimated that the plot could fetch as much as $420 psf ppr.

The bid prices show future pricing of suburban condominiums is consolidating, said Li Hiaw Ho, executive director at CB Richard Ellis.

Added Chia Siew Chuin, Colliers International’s director of research & advisory: ‘The tender bids received reflect a more cautious market outlook and possibly some level of opportunistic bidding.’

Credo Real Estate executive director Ong Teck Hui said that two factors could have led to cautious bidding.

‘The recent financial market turmoil has led to increased uncertainties,’ he said.

‘In addition, the Punggol, Sengkang and Upper Serangoon area is getting more crowded with some 2,600 units coming from several new projects… Some of these projects are near MRT stations and will provide stiff competition for buyers.’

Analysts also noted that the top bid of $323 psf ppr offered for this site is around 20 per cent lower than the top bid of $406 psf ppr achieved for a nearby residential plot at the corner of Punggol Central and Punggol Walk, which was sold to Sim Lian Group in December 2010.

Based on a land cost of $323 per sq ft ppr, units at the new site could breakeven at about $660-680 psf and sell at around $860-900 psf, Colliers’ Ms Chia said.
Source: Business Times © Singapore Press Holdings Ltd

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