Koh Brothers’ $163m tops bids for Flora Drive site

Business Times: Thu, Oct 20
KOH Brothers Group beat out seven other bidders with its top offer for a residential site at Flora Drive, in the Upper Changi area, at the close of the state tender yesterday. The company offered $163 million or $361 per square foot per plot ratio…
KOH Brothers Group beat out seven other bidders with its top offer for a residential site at Flora Drive, in the Upper Changi area, at the close of the state tender yesterday.

The company offered $163 million or $361 per square foot per plot ratio (psf ppr) for the 99-year leasehold land parcel – in line with what analysts estimated that the site would fetch when it was launched in late August.

Koh Brothers managing director Francis Koh said that if his company is awarded the site, it will build a residential project with ‘green’ and ‘sporty’ elements and around 400-410 apartments.

The project could incorporate elements such as a running track and a rock climbing wall, he said.

Koh Brothers’ bid was 10 per cent above the second highest offer, which was from Hong Leong Group unit Tripartite Developers. Tripartite bid $147.6 million or $327 psf ppr.

The two lowest bids came from EL Development and MCL Land. Both offered $130 million or $288 psf ppr.

Mr Koh said his company is keen on the site due to its attractive location: ‘It is in an established residential area, surrounded by many private housing projects.’

Li Hiaw Ho, executive director of CBRE Research, likewise noted that the site at Flora Drive is adjacent to the Japanese Primary School and surrounded by several condominiums including Hedges Park, The Gale (both under construction), Ferraria Park, Edelweiss Park and Dhalia Park.

‘This location has a high expatriate tenant pool comprising Japanese and other nationalities working in Changi Business Park, Changi Industrial Park and Changi International Airport,’ Mr Li said.

Credo Real Estate executive director Ong Teck Hui said that the eight bids and top bid of $361 psf ppr show ‘greater enthusiasm’ than what was seen at the tender for the adjacent site, which closed in June this year.

There were just four bidders for that site, which was sold for $325 psf ppr to Frasers Centrepoint. Frasers also participated in yesterday’s tender, and its bid of $310 psf ppr came in fourth.

‘The positive response to (yesterday’s) tender follows the encouraging September sales data announced on Monday, which could have influenced tender participation as well a pricing for the site,’ Credo’s Mr Ong said.

‘Some 1,631 private homes were sold by developers in September – a 21 per cent pick-up from August sales – suggesting firm underlying demand especially for mass market units. The bidders are obviously confident that demand can be sustained and would not be too dampened by the uncertain economic outlook.’

CBRE said that within the neighbourhood, units in freehold The Gale and Ferraria Park were sold at $900-1,050 psf in August and September 2011. Units in the 99-year leasehold Hedges Park condominium have been marketed at $800-950 psf since April 2011; to date, about 65 per cent of the 501-unit project has been sold.

Said Mr Li: ‘It is likely that units in the new project will be priced at similar levels.’

Source: Business Times © Singapore Press Holdings Ltd.

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