Residential site in Margaret Drive triggered for tender

[reporter2]

http://www.straitstimes.com/business...red-for-tender

Residential site in Margaret Drive triggered for tender

Nov 4, 2016

Wong Siew Ying


A choice city-fringe residential site in Margaret Drive, close to Commonwealth MRT station, will soon be put up for tender.

Experts expect keen interest in the 0.48ha site, which could yield 275 condominium units.

The move comes after the Urban Redevelopment Authority (URA) said yesterday that a developer has committed to bid at least $185.758 million for the 99-year leasehold plot on its reserve list.

Under the reserve list system, a site will be put up for tender only if a developer's minimum bid price is acceptable to the Government.

The plot has a maximum gross floor area of 22,195 sq m, and is close to amenities, including Queensway Shopping Centre, Ikea Alexandra and hotel and retail development Alexandra Central.

Analysts told The Straits Times that the site is likely to receive keen interest from developers owing to its relatively central location.

PropNex Realty chief executive Ismail Gafoor said: "We expect bids to come in at between $780 and $880 per sq ft per plot ratio (psf ppr), with possibly six to eight bidders contesting."

OrangeTee expects six to 12 bids and believes the winning bid is likely to be from $790 to $840 psf ppr.

"Developers would have to take into consideration the ample number of unsold inventory and potential future competition in this region," said OrangeTee head of research and consultancy Wong Xian Yang.

One upcoming launch in the area is Queens Peak. Another project in Alexandra View is expected to hit the market next year.

"The...land parcel on which Queens Peak sits was sold in June 2015 at $871 psf ppr. This price level will be heavily used as a reference by developers interested in the subject site," said SLP International Property Consultants executive director Nicholas Mak. He expects the top bid to range from $858 to $912 psf ppr, with seven to 12 bids.

The URA said the public tender for the Margaret Drive site will be launched in one to two weeks.

[reporter2]

http://www.businesstimes.com.sg/real...bid-of-s18576m

Margaret Drive site triggered for sale with minimum bid of S$185.76m

Property players see strong developer interest given the Reserve List plot's location and palatable size

By Lynette Khoo

[email protected]

@LynetteKhooBT

Nov 4, 2016


A LAND parcel in Margaret Drive that is big enough for 275 homes has been triggered for sale after a developer committed to bid at least S$185.76 million for it.

This is a Reserve List site under the government land sales (GLS) programme that can be released for sale only when the minimum price committed by a developer is acceptable to the government.

Based on the maximum gross floor area (GFA) of 22,195 square metres, this minimum price translates to S$777.54 per square foot per plot ratio (psf ppr).

The Urban Redevelopment Authority (URA) said on Thursday that it had accepted the application to put up the site for sale by public tender, which will be launched in about one to two weeks. The tender period for the 0.48 hectare land parcel will be about four weeks.

Property consultants expect to see strong interest from developers given the site's location and its palatable size. But their projections vary widely from five bids to 13 bids, with the winning bid likely to be in the region of S$800-912 psf ppr based on BT's poll.

The 99-year leasehold site is nestled within an established residential enclave near the Commonwealth MRT station. It is close to the Ayer Rajah Expressway, with nearby retail and dining options at the Dempsey Cluster, Queensway Shopping Centre, Ikea Alexandra and Alexandra Central.

There are also public amenities and schools in close proximity.

Lee Nai Jia, head of research for South-east Asia at Edmund Tie & Company, noted that the Commonwealth area is popular, given that it is a few stops to the CBD and is also near the Buona Vista area, which is a strong rental catchment area. New home prices in Commonwealth now range from S$1,400 to S$1,900 psf.

"Looking at the technical conditions of the tender, the proposed site faces several restrictions as they have to check for noise level from the neighbouring churches," he said.

"Additionally, the site is close to MRT track and there needs to be a minimum 35m setback (from front wall). The developer may have less room to manoeuvre in terms of design. The bidder who wins is also likely to incorporate cycling amenities as they get GFA exemptions for the cycling facilities."

SLP International executive director Nicholas Mak noted that the site was among the more attractive ones in the GLS Reserve List due to its location near the popular East-West MRT line and the plot's relatively small and manageable size.

By comparing the trigger bid pricing of S$777.54 psf ppr for this site with the land price of S$871 psf ppr that Hao Yuan Investment paid last year for a 1.05ha parcel in Queenstown where it is launching Queens Peak, the trigger bid is "high but not ridiculously high", Mr Mak said.

"This developer that triggered this tender may be using the same tactics as the developer who triggered the tender of the Central Boulevard white site, which is to trigger the tender at a fairly high price to discourage other developers to bid."

R'ST Research director Ong Kah Seng noted that developers are generally running low in land inventory, and are thirsty to replenish landbank, in part to demonstrate that they have longer-term corporate growth strategies as land development is their bread and butter activity.