http://www.straitstimes.com/archive/...red-sale-month
Third reserve site triggered for sale this month
Bids for 2.38ha residential plot near Redhill MRT station could hit $500m
Published on Jul 31, 2012
By Esther Teo, Property Reporter
A DEVELOPER has committed to bid at least $390 million for a reserve site in Prince Charles Crescent - the third such plot triggered for sale this month.
The 2.38ha residential parcel near Redhill MRT station will now be put up for sale, the Urban Redevelopment Authority (URA) said yesterday.
The bid works out to $725 per sq ft per plot ratio (psf ppr).
Experts say the regular-shaped site in Prince Charles Crescent within the prime residential area is expected to attract healthy interest from bigger players. It can yield about 590 apartments.
While the 99-year leasehold plot is attractive, the hefty overall quantum is likely to limit the number of bidders, although bids could hit $500 million.
Earlier this month, a 0.82ha site in Tai Thong Crescent and another small 0.27ha plot in Farrer Road were triggered for sale as developers continue to replenish their land banks amid record new home sales in the first half of the year.
Confirmed list sites go on sale regardless of interest, while those on the reserve list are put up for tender only if developers make an acceptable initial offer.
Experts said developers who build mainly in the mid-tier to high-end segments are keen on triggering city fringe and city centre sites, as most plots on the confirmed list of the government land sales programme are in suburban areas like Punggol and Jurong.
DWG's senior manager of research and consultancy, Mr Lee Sze Teck, expects bidders for the Prince Charles Crescent site to be cautious, given the muted performance of projects in the central region over the past year.
The requirement to build and sell all units within five years to avoid paying the additional buyer's stamp duty will also dampen bids.
A winning bid of $430 million to $457 million - or $800 to $850 psf ppr - is expected with up to six bidders, Mr Lee said.
Mr Nicholas Mak, SLP International's head of research, expects four to nine bids, with a top one of $408 million to $441 million - or $760 to $820 psf ppr.
Recent transacted prices of two newer condos near the site - Ascentia Sky and The Metropolitan Condominium - have hit about $1,300 to $1,400 psf, he noted.
"The winner of this tender could aim to launch the project at above $1,400 psf, due to its proximity to the prestigious Tanglin planning area."
ERA Realty key executive officer Eugene Lim called the site's location "supreme". He expects selling prices to begin at $1,500 psf and bid prices to come in at between $900 and $930 psf ppr, or $484 million to $500 million.
EL Development managing director Lim Yew Soon acknowledged that while the location is very attractive, the affordability of the end-product must be taken into consideration as well.
"Suburban homes are still the most affordable and the bulk of demand still comes from HDB upgraders... City fringe and city centre homes are out of reach to most Singaporeans," he said.
"Developers triggering these sites are likely to be those that have exhausted their land bank but whose business strategies do not involve them developing suburban homes."
The Prince Charles Crescent site tender is expected to be launched in two weeks, the URA said. The tenders for the Tai Thong Crescent and Farrer Road sites were launched yesterday.
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