Chinese firm puts in top bids for two housing plots

[reporter2]

http://www.straitstimes.com/archive/...plots-20131129

Chinese firm puts in top bids for two housing plots

Published on Nov 29, 2013

By Rachael Boon


A DEVELOPER owned by three Chinese nationals has lodged the highest bids for two adjacent private residential plots in Upper Serangoon View, which each attracted eight contenders.

Kingsford Development tendered $258.8 million, or $522 per sq ft per plot ratio (psf ppr), for Parcel A, which has a site area of 165,141 sq ft - above the expected range of $450 to $480 psf ppr.

For the 128,663 sq ft Parcel B, Kingsford tendered $201.6 million, which is also $522 psf ppr.

Both plots were launched for public tender on Sept 30 under the Urban Redevelopment Authority's new tender batching system.

This is an experiment by the URA to close the tenders of adjacent or similar sites on the same day, in an attempt to moderate bids.

The tender closed yesterday.

Analysts said the move could have succeeded in moderating the bids for these sites, if not for Kingsford's aggressive bids.

Ms Chia Siew Chuin, director of research and advisory at Colliers International, said the second-placed to eighth-placed bids showed that developers' tender bids were moderate.

She added: "If they need to replenish their land bank and have the funds to go for both sites, this system may not be effective in stopping them."

CBRE executive director for residential Joseph Tan was not surprised by Kingsford's bids, "given that the top bidder is a fairly new entrant who wants to compete with mainstream developers to shore up its land bank".

Kingsford's bid for Parcel A was 16 per cent higher than second-placed EL Development's, while its bid for Parcel B was 13 per cent higher than that submitted by second-highest bidders Maxdin and SingHaiyi Residences.

This is not the first time Kingsford has topped the bidding in a land tender.

Last year, it beat six other developers and was awarded the tender for a 136,148 sq ft residential site in Hillview Avenue, where the 512-unit Hillview Peak project now sits.

The developer tendered $243.2 million or $638 psf ppr for the site, which is located near the Bukit Timah Nature Reserve.

The latest sites, overlooking the Sungei Serangoon river and the Serangoon Park Connector, were offered for sale on 99-year lease terms.

The latest tender result also shows that foreign developers continue to outbid local players in state tenders, said OrangeTee research head Christine Li.

She said: "The developer is estimated to sell its projects from $1,050 psf. Currently, transactions in the vicinity are between $950 and $1,000 psf."

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[reporter2]

http://www.businesstimes.com.sg/arch...-view-20131129

Published November 29, 2013

Good response to adjacent plots at Upper Serangoon View

By Mindy Tan [email protected]


[SINGAPORE] Despite the slowdown in new private home sales, demand for land remains strong, with two adjacent plots at Upper Serangoon View garnering eight bids each.

This is despite the Urban Redevelopment Authority (URA) rolling out the two adjacent sites and closing the tenders for both on the same day. It is the first time that the URA has attempted this with two adjacent parcels, although, it had earlier this year conducted simultaneous tender closings for three executive condominium (EC) sites. The three EC sites were in different areas - two in Punggol and one located near Jurong Country Club.

The top bid for both sites was put up by Kingsford Development, at $522.43 per square foot per plot ratio (psf ppr), which translates into $258.8 million for Parcel A and $201.6 million for Parcel B.

Parcel A has a land area of 165,125 sq ft and is located next to Rio Vista condo, while Plot B has a land area of 128,644 sq ft.

Kingsford Development beat the second highest bids for Parcel A and Parcel B by 16 per cent and 12.7 per cent respectively.

"While the bids seem bullish amid current buying sentiment, it indicates the developer's intention to land bank, to cement its position, and to minimise price competition it could potentially face in the vicinity," said Chia Siew Chuin, director of research and advisory at Colliers International.

Knight Frank Singapore's research head, Alice Tan, had pointed out earlier that there were currently eight private housing projects being built within a two-kilometre radius of the two sites. As at end-September, when the sites were launched, about 85 per cent of the total 4,840 units from the eight projects had been sold.

Notably, both parcels drew bids from five common participants, namely Kingsford Development, EL Development, Meteorite Land Singapore, MCL Land (Brighton), and a joint-venture between Verwood Holdings, Intrepid Investments and TID Residential.

According to Joseph Tan, executive director, residential, at CBRE, the differential between the top bid and the second highest bid for both plots is "not surprising", given that Kingsford Development is a "fairly new entrant who wants to compete with mainstream developers to shore up their landbank".

That being said, the latest tender result shows a trend of foreign developers continuing to outbid local players, pointed out Christine Li, head of research at Orange Tee.

"One of the reasons could be the continued availability of liquidity in the financial market which encourages foreign players to take on higher risks," she suggested.

Based on Kingsford Development's website, the developer is based in Shenyang, China. Given that the real estate market in Shenyang has slowed down quite significantly over recent years, this move could be read as Kingsford diversifying their real estate portfolio outside its home country, she added.

While Kingsford Development has been relatively active in recent land tenders here - it also bid in the last EC site tenders where all three parcels closed on the same day - it is probably best known for winning the site at Hillview Avenue, which was subsequently developed into the 512-unit Kingsford @ Hillview Peak.

Parcel A's second highest bid was put up by EL Development, at $450.36 psf ppr. The lowest bid was put up by CEL Residential Development, at $321.33 psf ppr.

Parcel B's second highest bid was put up by Maxdin and SingHaiyi Residences ($463.52 psf ppr), while the lowest bid for the parcel was put up by MCL Land (Brighton), at $318.96 psf ppr.

Colliers' Ms Chia estimated the breakeven cost for the proposed developments on both sites to be in the range of $860 to $920 psf. As such, the selling price could start from $1,000 psf.

Orange Tee's Ms Li said that she expects the developer to sell its projects from $1,050 psf. Currently, transactions in the vicinity range from $950 to $1,000 psf.

[DC33_2008]

Such bidding system does not work with Chinese developers. But got to be careful with such development when market turns soft in china and Singapore. They maybe bringing stacks of RMB in .

http://www.businesstimes.com.sg/arch...-view-20131129

Published November 29, 2013

Good response to adjacent plots at Upper Serangoon View

By Mindy Tan [email protected]


[SINGAPORE] Despite the slowdown in new private home sales, demand for land remains strong, with two adjacent plots at Upper Serangoon View garnering eight bids each.

This is despite the Urban Redevelopment Authority (URA) rolling out the two adjacent sites and closing the tenders for both on the same day. It is the first time that the URA has attempted this with two adjacent parcels, although, it had earlier this year conducted simultaneous tender closings for three executive condominium (EC) sites. The three EC sites were in different areas - two in Punggol and one located near Jurong Country Club.

The top bid for both sites was put up by Kingsford Development, at $522.43 per square foot per plot ratio (psf ppr), which translates into $258.8 million for Parcel A and $201.6 million for Parcel B.

Parcel A has a land area of 165,125 sq ft and is located next to Rio Vista condo, while Plot B has a land area of 128,644 sq ft.

Kingsford Development beat the second highest bids for Parcel A and Parcel B by 16 per cent and 12.7 per cent respectively.

"While the bids seem bullish amid current buying sentiment, it indicates the developer's intention to land bank, to cement its position, and to minimise price competition it could potentially face in the vicinity," said Chia Siew Chuin, director of research and advisory at Colliers International.

Knight Frank Singapore's research head, Alice Tan, had pointed out earlier that there were currently eight private housing projects being built within a two-kilometre radius of the two sites. As at end-September, when the sites were launched, about 85 per cent of the total 4,840 units from the eight projects had been sold.

Notably, both parcels drew bids from five common participants, namely Kingsford Development, EL Development, Meteorite Land Singapore, MCL Land (Brighton), and a joint-venture between Verwood Holdings, Intrepid Investments and TID Residential.

According to Joseph Tan, executive director, residential, at CBRE, the differential between the top bid and the second highest bid for both plots is "not surprising", given that Kingsford Development is a "fairly new entrant who wants to compete with mainstream developers to shore up their landbank".

That being said, the latest tender result shows a trend of foreign developers continuing to outbid local players, pointed out Christine Li, head of research at Orange Tee.

"One of the reasons could be the continued availability of liquidity in the financial market which encourages foreign players to take on higher risks," she suggested.

Based on Kingsford Development's website, the developer is based in Shenyang, China. Given that the real estate market in Shenyang has slowed down quite significantly over recent years, this move could be read as Kingsford diversifying their real estate portfolio outside its home country, she added.

While Kingsford Development has been relatively active in recent land tenders here - it also bid in the last EC site tenders where all three parcels closed on the same day - it is probably best known for winning the site at Hillview Avenue, which was subsequently developed into the 512-unit Kingsford @ Hillview Peak.

Parcel A's second highest bid was put up by EL Development, at $450.36 psf ppr. The lowest bid was put up by CEL Residential Development, at $321.33 psf ppr.

Parcel B's second highest bid was put up by Maxdin and SingHaiyi Residences ($463.52 psf ppr), while the lowest bid for the parcel was put up by MCL Land (Brighton), at $318.96 psf ppr.

Colliers' Ms Chia estimated the breakeven cost for the proposed developments on both sites to be in the range of $860 to $920 psf. As such, the selling price could start from $1,000 psf.

Orange Tee's Ms Li said that she expects the developer to sell its projects from $1,050 psf. Currently, transactions in the vicinity range from $950 to $1,000 psf.

[2824]

Such a bidding system may inevitably force developers to bid higher and beyond their prudent financial resources, as they want to win all bids at a similar location to monopolise the area. (Ie win big or lose big mentality).

Maybe should only allow companies to put in one bid for either plot rather than for both, this will create more uncertainty and more careful bids by developers.