Surprise top bid for Pasir Ris site

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On April 12, 2012
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Business Times: Thu, Apr 12
  ANALYSTS were surprised by the “bullish” top bid of $472 per square foot per plot ratio (psf ppr) for a 251,036 square feet site located at Elias Road/Pasir Ris Drive 3. Put up by Elitist Development, a company linked to Sin Soon Lee and whose sole…

ANALYSTS were surprised by the “bullish” top bid of $472 per square foot per plot ratio (psf ppr) for a 251,036 square feet site located at Elias Road/Pasir Ris Drive 3.

Put up by Elitist Development, a company linked to Sin Soon Lee and whose sole shareholder is Lim Tiong Joo, the top bid was 19.3 per cent higher than the next bid, put up by OUE Reef Development, at $395.5 psf ppr.

The site’s proximity to amenities like Elias Mall and Pasir Ris Park, its location next to a landed housing estate, and “the sustained strong performance of the OCR (Outside Central Region) market and a sanguine market outlook” could have contributed to the top bidder being more bullish on eventual launch price than the rest, said Credo Real Estate executive director, Ong Teck Hui.

Analysts had expected the top bid to be between $360 and $470 psf ppr when the site, which is zoned for strata landed housing or condominium units, was launched in February.

R’ST Research director Ong Kah Seng said the high bid offered could be rooted in specific objectives such as “a developer who pressingly wants to have a first experience in a location”, ensuring “territorial presence”, or “a developer who strongly felt the uniqueness and potential in the site, leading to a significant value ascribed”.

Li Hiaw Ho, executive director of CBRE, noted that the nine bids garnered “show developers’ keen interest in the residential market”. Based on the bid price, the new condominium may be priced at about $900 psf, he said.

Lee Sze Teck, senior manager of research and consultancy at DWG, said the launch price for the project could be in the range of $900 psf to $950 psf. This places the launch price above The Palette’s median selling price of around $900 psf, taking into account that The Palette is nearer the MRT station, he said.

While acknowledging there is a large pool of potential home-buyers in the area, Nicholas Mak, executive director of research and consultancy SLP International, pointed out that the upcoming project will face stiff competition via as-yet unlaunched projects, and upcoming government land sale (GLS) sites.

For instance, at Pasir Ris Rise – next to Ripple Bay – a Hoi Hup-led consortium bagged a condo plot in October, on which it intends to launch the 376-unit Sea Esta. Another project in the pipeline is at Flora Drive (Upper Changi area), which was awarded to Realty Consortium, a subsidiary of Koh Brothers, in October.

There is also the 2.25-hectare residential plot on the GLS confirmed list, which will be launched in April, noted Mr Mak.

“They will face quite a bit of competition, and will have to monitor their competitors closely and formulate their pricing strategy accordingly,” he said.

Other bidders include Sin Heng Chan unit, Strategic Developments ($360.8 psf ppr), Frasers Centrepoint ($351.1 psf ppr) and Guocoland unit First Changi Development ($319.2 psf ppr).

 

Source: Business Times © Singapore Press Holdings Ltd

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