http://www.straitstimes.com/archive/...ussle-20140115
Paya Lebar residential site sees tight seven-way tussle
'Healthy interest' due to Bartley MRT station, success of 2 nearby projects
Published on Jan 15, 2014
By Cheryl Ong
A TENDER for a residential site in Upper Paya Lebar Road had been expected to attract keen interest from developers - and it lived up to its billing.
The site had drawn seven bids in a closely-fought battle when the tender closed yesterday.
Property analysts said they expected "healthy interest" in the 99-year leasehold site, as it was near major transportation links.
Developers would have been encouraged by the success of two nearby projects, they added.
The top bid from UOL Overseas Investments - a unit of the UOL Group - came in at $392.3 million, or $648.30 per sq ft (psf) per plot ratio (ppr).
This was just 3.2 per cent higher than the next highest bid of $378.3 million, or $625.20 psf ppr, from EL Development.
A consortium comprising Frasers Centrepoint's FCL Topaz, Far East Civil Engineering and Sekisui House came in third with its offer of $344.9 million, or about $570 psf ppr, which was 9.7 per cent lower than EL Development's bid.
Ms Chia Siew Chuin, research head of Colliers International, said the gap between the top two bids and the remaining offers reflects the difference in developers' confidence in the property market, after tougher loan curbs hit affordability of homes.
Consultants had expected the site to garner a winning bid of $470 to $750 psf ppr, with five to 10 bids lodged, when it was put on the market on Nov 18.
CBRE research head Desmond Sim said UOL's offer had beaten the winning bids for nearby sites, where the 702-unit Bartley Residences and 375-unit Bartley Ridge are being developed.
Bartley Residences, next to the site, was sold at $621 psf ppr in March 2011. Across the road, Bartley Ridge was sold for $495 psf ppr in January 2012, Mr Sim said.
"Confidence is buoyed by the success of the previous two sites. Bartley Residences is sold out and Bartley Ridge is close to selling out," he said.
On top of that, land parcels in this upcoming residential enclave are scarce, noted SLP International research head Nicholas Mak.
Consultants said developers would have been drawn to the 216,113.3 sq ft site's location near the Bartley MRT station and popular suburban shopping mall nex.
UOL said it plans to build a 17-storey condo with 700 units if awarded the site.
Consultants said break-even prices could be between $1,050 and $1,100 psf, placing selling prices between $1,300 and $1,400 psf.
But Mr Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, said he does not expect UOL to raise prices much higher than those for units at Bartley Residences and Bartley Ridge which were sold for $1,270 psf on average.
"It appears that the units at the subject site could be priced around $1,200 psf or less on average, taking into account a slower market."
[email protected]