http://www.businesstimes.com.sg/prem...-plot-20130906
Published September 06, 2013
FCL units' stunning bid for Yishun plot
Their $1.4b offer for mixed-use plot is 47% higher than next bid
By Felda Chay [email protected]
[SINGAPORE] A mixed-use commercial and residential plot at Yishun Central 1 drew a top bid from units linked to Frasers Centrepoint Ltd (FCL) that far surpassed that of the second-highest bidder and consultants' expectations, though the number of bidders were at the tail end of predictions.
North Gem Development and FC North Gem Trustee put in a top bid of $1.4 billion, or $1,077 per square foot per plot ratio (psf ppr), for the 99-year leasehold site.
This is 47 per cent higher then the second-highest bid, and way above the top bid of $750 and $850 psf ppr that consultants had expected. In total, five bids were placed, with consultants earlier expecting between five and 15 bids.
Christopher Tang, chief executive of Frasers Centrepoint Commercial, said that Frasers' bid "demonstrates our confidence in the suburban mall sector, and is line with our strategy to strengthen our foothold in the Yishun area".
The plot of land is right beside the Northpoint mall, which is under the portfolio of FCL unit Frasers Centrepoint Trust.
The group's plans for the site include developing a 12-storey integrated complex comprising 900 residential units. These apartments will sit on top of a retail mall, bus interchange and community club.
Said Mr Tang: "Having operated Northpoint for the last two decades, we are very familiar with the Yishun area. We believe this is one of the last remaining mixed-use sites within the Yishun central area, which has the potential to become one of the largest integrated developments in Singapore.
"Unlike previous residential land sales in Yishun, this site is within walking distance from the Yishun MRT station. Strategically located at the Yishun central area, it is well connected by major arterial roads and expressways."
Noting that the plot is next to Northpoint mall, he said the group may integrate the new development with Northpoint through a covered pedestrian promenade and link bridges, subject to the authorities' approval. "The integration with Northpoint will create synergies and operating economies for both retail malls, through an improved tenant mix and enlarged offerings for shoppers," said Mr Tang.
Consultants noted that the price Frasers is forking out is way above the land price of the area currently, but believe that factors such as its proximity to the MRT station and bus interchange will help to draw shoppers and residential property buyers.
Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, noted that this is the most prime site to come onto the market in Yishun.
"As current market values for the residential and commercial components would result in a land price of around $800 psf ppr, the high top bid for the site reflects an expectation for values to rise above current levels in order to justify it."
"The commercial component will enjoy high pedestrian traffic due to its transportation connectivity and this would result in strong patronage for the retail units. This could have led to more optimistic estimates on rents and capital values in working out the land price," added Mr Ong.
He predicts strong demand for the apartments, as potential buyers, especially those living in Yishun, will be drawn to the site's locational attributes and amenities such as easy access to buses and the MRT.
He expects buyers to fork out an average price of $1,300 psf for a unit there.
Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants, noted that CEL Property in January clinched a mixed development site located between Yishun Ring Road and Yishun Avenue 9 at $212.1 million or $794.44 psf ppr.
So Frasers' bid is 35.6 per cent higher than what CEL paid, he noted.
He believes that apartments in the new development could be launched at prices ranging from $1,350 to $1,450 psf in 2014.
"Skies Miltonia, a 99-year leasehold condominium project in the Yishun area launched recently for sale has transacted at an average price of $1,070 psf in the primary market this year.
"However, Skies Miltonia is located about 1.7 kilometres from the Khatib MRT Station, while the subject property is just across the road from the Yishun MRT Station," said Mr Mak.
The second highest bid was from a consortium involving Far East Civil Engineering, Far East Orchard Limited and Sekisui House. They bid $969.3 million, or $730.6 psf ppr, for the site.
Other bids were nearer to the second highest bid; the lowest was $704.5 million, or $531.02 psf ppr, put in by the CapitaLand-owned Yorkshire Investments and Yorkshire Trustee ( as trustee of Yorkshire Mall Trust).
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