Mar 4, 2011

$320m top bid for Bedok site

Bids are more realistic, also reflect confidence in market: Analysts

By Cheryl Lim

A CONDOMINIUM development site in Bedok Reservoir Road, heralded as a key test of the Government's cooling measures in January, has attracted relatively modest bids from developers.

The top bid, a joint venture between UOL Group and SingLand, came in at $320 million. This works out to $465 per sq ft per plot ratio (psf ppr).

While the bid exceeded some experts' predictions, it stands in stark contrast to last week's top bid of $550 million - or $869 psf ppr - submitted by property giant CapitaLand for a plot next to Bishan MRT station.

Analysts say the bids for the 4.56ha Bedok site are more realistic and in line with their earlier expectations of four to seven bidders and a top bid hovering between $450 psf ppr and $500 psf ppr.

Credo Real Estate's head of research and consultancy, Mr Ong Teck Hui, said unlike the Bishan site that is located in a prime suburb near an MRT station, the Bedok plot is a more typical suburban site.

Therefore, said Mr Ong, the response in the tender can be regarded as a better gauge of developers' general sentiments towards the Jan 14 cooling measures.

Several other analysts also concluded from the results that despite the cooling measures, developers are still generally upbeat about long-term demand.

The Bedok sale exercise attracted a total of eight bids, and had been widely hyped by market watchers as a site that would act as a barometer of developers' response to the cooling measures.

A consortium of Frasers Centrepoint, Far East Organization and Sekisui House came in a close second, at $312 million.

In third spot was Hong Kong billionaire Li Ka-shing's Cheung Kong (Holdings) with a bid of $293 million. GuocoLand submitted a $283 million bid, with Allgreen Properties next at $256 million.

City Developments was sixth with $248 million. Leng Hoe Development's bid was $215 million while Mezzo Development had the lowest bid of $201 million.

Speaking to The Straits times in a phone interview, UOL Group's property president Liam Wee Sin said the group was attracted to the 99-year leasehold site given its proximity to the reservoir and facilities such as the park connector.

'We have sold most of our sites and this new project will fit in well with our land replenishment plans,' he said.

The proposed new project would be similar to UOL's Meadows @ Peirce condo located near the Peirce reservoir, he said. It would capitalise on the reservoir location and be designed to appeal to residents who enjoy park settings.

He said the development would be five storey with about 600 units.The group is also looking into including strata landed housing units within the development if it clinches the tender.

The URA will announce the winning bid at a later date.

Analysts predict units at the new development could see prices starting from around $900 psf to $1,000 psf.

This, they said, would put prices of the upcoming project on a par with neighbouring condos.

According to data from CBRE Research, units at Waterfront Isle, which was launched last month, sold for around $920 psf, while homes at Sim Lian Group's Waterview development sold for about $900 psf.

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