Upper Serangoon EC site attracts 7 bids

Business Times: Fri, Mar 02
  INTEREST in executive condominiums (ECs) remains high, based on the latest tender results for a 99-year EC site at Upper Serangoon View/Upper Serangoon Road, say consultants.  The site, which has a land area of some 133,388.4 square feet (sq ft) an…

INTEREST in executive condominiums (ECs) remains high, based on the latest tender results for a 99-year EC site at Upper Serangoon View/Upper Serangoon Road, say consultants.

The site, which has a land area of some 133,388.4 square feet (sq ft) and plot ratio of 3.5, secured a top bid of $303 per square foot per plot ratio (psf ppr) yesterday, beating six other bids. The site is expected to yield about 435 units.

‘The optimism could be due to the absence of EC tenders for more than four months while new EC launches continue enjoying steady demand from buyers,’ said Credo Real Estate executive director Ong Teck Hui, who noted that at $303 psf ppr, the bid exceeds the top bids of the last three EC tenders for comparable sites.

Lee Sze Teck, senior manager at DWG Research and Consultancy, agreed: ‘The level of interest shows that developers think that the EC market is still robust.’

The top bid, put in by Ho Lee Group and Evia Real Estate Management, beat the second-highest bid of $283 psf ppr put in by EL Development.

Li Hiaw Ho, executive director of CBRE Research, expects a break-even cost of around $650 psf, with the new project likely priced around $700 psf.

DWG’s Mr Lee said: ‘All three top bidders are companies in the construction trade, hence they will be able to manage the construction costs. The estimated break-even cost is between $550 and $600 psf. The estimated selling price is between $670 and $720 psf, which is similar to Twin Waterfalls.’

The third highest bid came from Peak Living, a unit of Kheng Leong, at $257.8 psf ppr.

Other developers who bid for the site included Mezzo Development, Qingjian Realty (South Pacific) Group, and Elitist Development. Frasers Centrepoint offered the lowest bid of $200 psf ppr.

Assuming the top bidder is awarded the site, it will be Ho Lee Group’s second EC site acquired within a span of five months. The last was at Pasir Ris Drive 3/Pasir Ris Link, at $291 psf ppr, in October 2011, said DWG’s Mr Lee.

In the previous tender, the top bid was put forth from a tie-up between Ho Lee Group and Maxdin. The latter is a subsidiary of UE E&C Ltd, which in turn is part of the United Engineers Group.

A project of some 400 units of various sizes is planned for the site. It is expected to be launched towards late March this year.

Interest in EC sites has been keener since the income ceiling for ECs was raised in August last year, reflecting developers’ confidence of sustained demand from a bigger pool of eligible buyers, said Credo’s Mr Ong. The income ceiling for ECs was raised from $10,000 to $12,000 last year.

Source: Business Times © Singapore Press Holdings Ltd.

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