PUBLISHED JUNE 21, 2013
CapitaLand's $366m bid for Coronation Road site tops 11 others
Its offer of $908.17 psf is 17% higher than closest rival's
BYMINDY TAN
CAPITALAND'S Athens Residential Development was found to have bid higher than 11 others at the close of tender yesterday for the 99-year leasehold site at Coronation Road.
The top bid was $366 million, or $908.17 per square foot of land, compared to the second highest bid put up by Far East Organization unit Astor Properties ($313.3 million, or $777.49 psf of land).
"We plan to develop a prestigious landed development comprising semi-detached houses and bungalows on this site. The development will be ready for launch around Q2 of 2014," said a CapitaLand Singapore spokesperson.
That the top bid was 17 per cent higher than the second illustrates CapitaLand's confidence in this market, said Joseph Tan, executive director, residential, CBRE.
"If developed into semi-detached houses, CBRE expects prices to start from $6 million," he added.
That the site managed to garner 12 bids shows that homebuyer's demand for landed housing is still strong, said Nicholas Mak, executive director, research and consultancy, at SLP International.
Christine Li, head of research and consultancy at Orange Tee agreed: "Developers are bullish on landed properties due to its limited pipeline supply unlike condominiums and apartments.
"The other reason could also be that prices of landed properties have outperformed non-landed properties since Q2 2009; prices of landed properties are now 87 per cent above the trough in 2009 as of Q1 2013. In comparison, prices of non-landed homes are only 53 per cent above the trough in 2009."
Assuming the developer were to build only semi-detached houses on the parcel, Ms Li said she expects the breakeven cost for each unit to be about $3.5 million.
SLP International's Mr Mak said he expects homes on the 99-year leasehold landed housing project to be launched at between $1,600 psf and $2,000 psf.
"The site is located near a Good Class Bungalow (GCB) area. Recent transacted prices of landed houses in this location ranged from $1,280 psf to $1,830 psf of land. But most of the landed houses in this area are on freehold or 999-year leasehold land," he said.
The landed housing plot, which measures about 403,007 sq ft, was a former Chinese cemetery acquired by the state and cleared for development in the late 1990s. Part of the attraction of the site is that it is located near Nanyang Primary School, Raffles Girls' Primary School, Nanyang Girls' High School, National Junior College, and Hwa Chong Institution.
It is also within walking distance to Farrer Road MRT and the future Tan Kah Kee MRT station.
According to Ong Kah Seng, director at R'ST Research, being located near good schools, and the limited new supply of landed housing plots could translate into fairly high resale interest in the longer term.
Sale of landed housing development sites are quite rare. The previous GLS site for landed housing which was put up for sale was in December 2011 for a site at Chestnut Avenue, which drew $70.8 million, or $510 psf of land.
Other bidders for the site include Chip Eng Seng's CEL EC Development which put up a bid of $298 million or $739.44 psf of land; a combined bid of $282.3 million ($700.48 psf of land) was also put up by City Developments Limited's Verwood Holdings, Hong Leong Holding's Intrepid Investments, and Hong Realty's Garden Estates; Allgreen Properties put up a bid of $229.0 million, or $568.18 psf of land.
The lowest bid was put up by Wing Tai Holdings unit, Wingzest Investment, at $163.1 million, or $404.73 psf of land.