First tender in new setting draws record bid

[mr funny]

http://www.businesstimes.com.sg/sub/...03940,00.html?

Published May 26, 2010

First tender in new setting draws record bid

EC plot in Sengkang fetches top bid of $320.58 psf ppr

By KALPANA RASHIWALA


(SINGAPORE) The first state land tender to close following the government announcement of bumper land sales for the second half has seen a record price for executive condominium land.

The plot, at Sengkang East Avenue and Buangkok Drive, however drew seven bids, down from 11 bids for an earlier plot at Compassvale Bow/Buangkok Drive at a tender in March.

Industry players also pointed out that for yesterday's tender, the top bid aside, the other bids were within expectation.

Market watchers suggest the bullish top bid of $320.58 per square foot of potential gross floor area could be due to the top bidder's ability to control costs better as it involves a joint venture involving a construction group and a steel supplier.

Maxdin Pte Ltd, a subsidiary of Greatearth Holding, which in turn is part of United Engineers, will hold a 65 per cent stake in the tie-up with Lee Carriers, which is part of Lee Metal Group, a leading fabricator and manufacturer of reinforcement steel products and a trader of steel products.

Maxdin was unsuccessful at two earlier tenders for EC sites that closed in March. It placed the third highest bid for a Yishun plot and was the fourth highest tenderer for the Compassvale Bow plot. Interestingly, Maxdin had offered a much lower price of $270.56 psf per plot ratio (psf ppr) for that site, despite the fact that it has a superior location (near Buangkok MRT Station), than its bid yesterday.

The Compassvale Bow plot drew a top bid of $315 psf ppr from a partnership between Frasers Centrepoint and Lum Chang. At yesterday's tender closing, Frasers Centrepoint, bidding solo, emerged in third position, with a $288 psf ppr bid.

'Bidders with financial muscle who have not been successful at recent tenders and who need to replenish land are hungrier than those who have already secured at least one site,' a developer suggested.

At yesterday's tender, the top bid was nearly 10 per cent higher than the second highest offer, of about $292 psf ppr, from a tie-up between Hoi Hup Realty and Sunway Developments.

Others who took part in yesterday's tender included Qingdao Construction (Singapore) at about $286 psf ppr, GuocoLand unit First Capital Holdings ($260 psf ppr) and a JV between NTUC Choice Homes and Chip Eng Seng ($240 psf ppr). Sim Lian Land placed the lowest bid, of $211 psf ppr.

Market watchers say the breakeven cost for Greatearth and Lee Metal could be around $600 psf. According to CB Richard Ellis, resale units at the neighbouring Park Green and The Rivervale ECs as well as The Florida in Hougang have been selling at $500-620 psf between January and May this year.

A spokesman for Greatearth's parent, United Engineers, said yesterday that the group's proposed scheme is for a project with about 500 units - comprising two, three and four-bedroom apartments with three-bedders making up the bulk of units. 'We're looking to launch the project in about six months. Greatearth will be project manager, and provide the design and build services, with Lee Metal being the passive investor.'

When the site was triggered for tender, analysts had estimated it would fetch $200-300 psf ppr. Before yesterday's tender close, the record price for EC land was the $315 psf ppr that Frasers Centrepoint and Lum Chang paid for the Compassvale Bow plot in March. That surpassed the previous record of $220 psf ppr for the Summerdale EC site in Boon Lay in May 1997.

'Give it time, land bids will tame. There's a lot of caution in the air,' said Knight Frank chairman Tan Tiong Cheng.

Industry players say visitorship at showflats slowed at the weekend, due to the weak stockmarket and the bumper land sales programme for H2.

[mr funny]

http://www.straitstimes.com/Money/St...ry_531448.html

May 26, 2010

Sengkang exec condo plot draws 7 bidders

Sign of healthy interest, but aggressive bidding appears to have abated

By Jessica Cheam


SEVEN property developers vied for a plum executive condominium spot in Sengkang, with the top bid coming in above market expectations at $176 million.

While the number of bids showed a healthy level of interest, they amounted to fewer than half the 18 offers a recent tender in Simei attracted.

This has prompted analysts to suggest yesterday that aggressive bidding seen from developers recently seems to have abated.

A joint venture between Maxdin, part of United Engineers' unit Greatearth Holding, and Lee Metal Group's Lee Carriers, lodged the top bid for the Sengkang site, said the Housing Board yesterday.

The $176 million offer works out to about $321 per square foot per plot ratio (psf ppr) for the 183,000 sq ft plot.

The price is about 70 per cent higher than the minimum offer price of $103.8 million lodged by an undisclosed developer who triggered the plot's tender last month.

It is also 10 per cent higher than the second-highest bid, lodged by Hoi Hup Realty and Sunway Developments at $160.1 million.

The other unsuccessful contenders included Frasers Centrepoint, Qingdao Construction (Singapore) and Sim Lian Land, which was lowest at $115.8 million.

The site in Sengkang East Avenue is near the Sengkang LRT system and could yield 465 executive condominium units, which are condo-style homes subject to public housing rules.

The top bid came in about 2 per cent higher than the Compassvale Bow executive condominium site, also in Sengkang, which was awarded at $193.28 million or $315 psf ppr in March.

Analysts said they expected the break-even cost for the project to be between $590 and $620 psf.

'New units will possibly sell above $650 psf,' said CBRE Research executive director Li Hiaw Ho.

He noted that nearby units in Park Green, The Rivervale and The Florida sold on the resale market for $500 to $620 psf between January and this month.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said units could even be launched at above $700 psf, depending on the market.

'At this level, prices are quite high for executive condominiums, as buyers expect them to be cheaper than private condos,' he added.

Mr Li said the bullish top bid could be because there are no more sites for such homes in Sengkang on the confirmed and reserve lists of the Government's land sale programme for the second half of this year.

Last week, the Government released the largest amount of state land for private homes in response to surging demand.

It put 18 residential or residential/ commercial sites on the programme for confirmed sale in the second half of the year, and 13 sites for residential use on the reserve list.

The confirmed list also includes four new executive condominium sites.

Mr Mak felt that given the glut of sites available for developers to choose from, the bids for the Sengkang site were 'too bullish'.

'With the release of so many sites, we expected it to have a dampening effect on bids,' he said.

Mr Mak noted that subsequent land tender values should start to moderate given the Government's aggressive move to make a wide range of sites available to developers.

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Hot properties nearby

# Resale units at three nearby executive condos - Park Green, The Rivervale and The Florida - have been selling at between $500 psf and $620 psf

# Units on the new land parcel will have to sell for between $590 psf and $620 psf for the developer to break even

# Some analysts estimate that units there will sell for $650psf or more