reporter2
10-09-12, 20:13
http://www.businesstimes.com.sg/specials/property/ura-puts-housing-plot-60-yr-lease-20120906
Published September 06, 2012
URA puts up housing plot with 60-yr lease
URA will also launch site for first hotel in Jurong lake district
By zeinab yusuf saiwalla
The government yesterday announced two firsts in its land sales programme - a residential site in Jurong which comes with an unusual 60-year leasehold term, and another plot that will see the first-ever hotel being built in Jurong.
URA said the 1.02-ha residential site in Jurong Jurong Kechil will have a maximum GFA of 153,267.17 sq ft and can be developed into a condominium, flats or retirement housing.
While short-term industrial, commercial and hotel sites are nothing new under the Government Land Sales Programme, this is believed to be the first time a private housing site is being sold on such short tenure under the GLS. Typically, the sites are released on 99-year lease.
Developers have options for a 30, 45 or 60-year-lease period for the plot, URA said. The development conditions for the site cap the maximum number of units at 203 units and can be built up to part five storeys and part eight storeys.
URA said the tender will be launched in about two weeks along with a hotel site, also in Jurong.
The land parcel at Jurong Town Hall Road will be the first hotel site in the Jurong Lake district. The parcel sits on a 0.9-ha plot and has a maximum gross floor area (GFA) of about 204,051.25 sq ft.
A developer has committed to pay at least $102 million or $499.82 per square foot per plot ratio (psf ppr) for the 99-year hotel site.
Commenting on the residential plot, Jones Lang LaSalle's national director of research Ong Teck Hui said: "The site is a popular suburban housing area supported by ample amenities and public transportation, so there should be good interest in this site."
The developer's trigger price for the residential land parcel which was made available through the Reserve List system in November 2006 was $24 million or $156.36 psf ppr for a 60-year lease term.
"As URA offers three options of different land tenures, the price of the land will be relatively cheaper as compared to the normal 99-year-leasehold land parcels from Government Land Sale Programme," said Nicholas Mak, SLP International's head of research.
He expects the tender to attract about five to 10 bids and added that most bidders are likely to select to bid for the 60-year land tenure because it will be more attractive to homebuyers and the longer land tenure will be easier for the homebuyer to obtain a mortgage.
Lee Sze Teck, senior manager of Dennis Wee Group (DWG), is looking at a top bid of between $200 and $250 psf ppr, an estimated breakeven cost between $450 and $500 psf, and an estimated sale price of between $550 and $600 psf.
"This is relatively affordable compared to freehold developments in the area which are going for around $1,000 psf," Mr Lee said.
As for the hotel development, Mr Mak said that although this is the first hotel site in the Jurong area, developers can however be expected to bid with a hint of caution, as the Jurong Lake locality is an untested hotel micromarket.
"In today's market, the estimated land price for this hotel site is expected to be $750 to $833 psf ppr, possibly attracting 5-10 interested bidders," Mr Mak added.
DWG's Mr Lee added: "The successful bidder for the site is likely to build a four-star 700-room business hotel to cater to the growing commercial hub at Jurong East."
He estimates that based on these assumptions, the estimated top bid for the site could be between $650 and $700 psf ppr while the breakeven price is between $1,050 and $1,100 psf.
Furthermore, as Jones Lang LaSalle's Mr Ong explained: "In December the URA is scheduled to release another large commercial site at Venture Avenue so it is going all out to create Jurong Gateway as the biggest commercial hub outside the city. The huge critical mass would warrant a hotel to complement the other business uses and it is timely to provide a hotel site for development."
Published September 06, 2012
URA puts up housing plot with 60-yr lease
URA will also launch site for first hotel in Jurong lake district
By zeinab yusuf saiwalla
The government yesterday announced two firsts in its land sales programme - a residential site in Jurong which comes with an unusual 60-year leasehold term, and another plot that will see the first-ever hotel being built in Jurong.
URA said the 1.02-ha residential site in Jurong Jurong Kechil will have a maximum GFA of 153,267.17 sq ft and can be developed into a condominium, flats or retirement housing.
While short-term industrial, commercial and hotel sites are nothing new under the Government Land Sales Programme, this is believed to be the first time a private housing site is being sold on such short tenure under the GLS. Typically, the sites are released on 99-year lease.
Developers have options for a 30, 45 or 60-year-lease period for the plot, URA said. The development conditions for the site cap the maximum number of units at 203 units and can be built up to part five storeys and part eight storeys.
URA said the tender will be launched in about two weeks along with a hotel site, also in Jurong.
The land parcel at Jurong Town Hall Road will be the first hotel site in the Jurong Lake district. The parcel sits on a 0.9-ha plot and has a maximum gross floor area (GFA) of about 204,051.25 sq ft.
A developer has committed to pay at least $102 million or $499.82 per square foot per plot ratio (psf ppr) for the 99-year hotel site.
Commenting on the residential plot, Jones Lang LaSalle's national director of research Ong Teck Hui said: "The site is a popular suburban housing area supported by ample amenities and public transportation, so there should be good interest in this site."
The developer's trigger price for the residential land parcel which was made available through the Reserve List system in November 2006 was $24 million or $156.36 psf ppr for a 60-year lease term.
"As URA offers three options of different land tenures, the price of the land will be relatively cheaper as compared to the normal 99-year-leasehold land parcels from Government Land Sale Programme," said Nicholas Mak, SLP International's head of research.
He expects the tender to attract about five to 10 bids and added that most bidders are likely to select to bid for the 60-year land tenure because it will be more attractive to homebuyers and the longer land tenure will be easier for the homebuyer to obtain a mortgage.
Lee Sze Teck, senior manager of Dennis Wee Group (DWG), is looking at a top bid of between $200 and $250 psf ppr, an estimated breakeven cost between $450 and $500 psf, and an estimated sale price of between $550 and $600 psf.
"This is relatively affordable compared to freehold developments in the area which are going for around $1,000 psf," Mr Lee said.
As for the hotel development, Mr Mak said that although this is the first hotel site in the Jurong area, developers can however be expected to bid with a hint of caution, as the Jurong Lake locality is an untested hotel micromarket.
"In today's market, the estimated land price for this hotel site is expected to be $750 to $833 psf ppr, possibly attracting 5-10 interested bidders," Mr Mak added.
DWG's Mr Lee added: "The successful bidder for the site is likely to build a four-star 700-room business hotel to cater to the growing commercial hub at Jurong East."
He estimates that based on these assumptions, the estimated top bid for the site could be between $650 and $700 psf ppr while the breakeven price is between $1,050 and $1,100 psf.
Furthermore, as Jones Lang LaSalle's Mr Ong explained: "In December the URA is scheduled to release another large commercial site at Venture Avenue so it is going all out to create Jurong Gateway as the biggest commercial hub outside the city. The huge critical mass would warrant a hotel to complement the other business uses and it is timely to provide a hotel site for development."