Yio Chu Kang site for sale

THE Urban Redevelopment Authority (URA) has launched a commercial and residential site for sale by public tender.

The land parcel, located at Yio Chu Kang Road and Seletar Road, has a site area of 2.1 hectares and is designated for a mixed commercial and residential development.

Interested developers must submit a bid of at least $40.5 million for the plot of land.

Two weeks ago, URA said it received an application from a developer which has committed to putting in a bid above the minimum price.

Previously, the land parcel had been made available for sale through the Reserve List System.

Under this system, a site would be released for sale only if a bid with an acceptable minimum price is received.

Source: Today, 21 Aug 2009

Mass-market site draws strong developer interest

Hong Leong puts in top bid of $280 psf ppr for the plot in Pasir Panjang

(SINGAPORE) An impressive 13 bids were received for a residential site at Chestnut Avenue in Bukit Panjang at the close of the tender yesterday, reflecting the renewed interest and the growing positive outlook among developers for mass market residential projects.

And the top bid of $143.7 million – or $280 per square foot per plot ratio (psf ppr) – put in by two companies in the Hong Leong Group stable was also much higher than expected by analysts, who had predicted a top bid of $200 psf ppr just a month ago.

Analysts said that developers are looking to restock their landbanks after selling a large number of homes – mostly in the mass market – over the past few months.

‘The level of interest shown by the bidders of this site at Chestnut Avenue indicate a growing appetite for mass market projects, especially so with suburban condominiums selling well in the present market,’ said Leonard Tay, director of CBRE Research.

‘With developers’ landbank of suburban sites running low, more of the suburban land parcels on the government land sales reserve list are likely to be triggered in the remainder of the year.’

Colliers International’s director for research and consultancy Tay Huey Ying agreed. While most developers still have fairly large high-end and luxury landbanks (as sales in these segments have been slow), their mass market landbanks have diminished greatly since the start of the year, Ms Tay said. And since mass market sites are hard to come by in the private sector, the government’s land sales programme is expected to be popular.

Among the bidders were large property groups such as Far East Organization, Sim Lian Land, Ho Bee Investments, Allgreen Properties and Frasers Centrepoint. Far East Organization made the second highest bid of $129.1 million, or $252 psf ppr.

The 99-year leasehold site in the state’s reserve list was triggered for launch last month, marking the first time in a year that the government has offered a residential site for tender. Then, the applicant who triggered the tender agreed to bid at least $62 million for the site, which works out to $121 psf ppr.

Under the reserve list system, the state offers a site for sale only if there is an application by a developer undertaking to bid at a minimum price acceptable to the government.

Property consultants said then that the successful bid for the site could come in anywhere between $136 and $200 psf ppr.

The top bid by Hong Leong Group is some 132 per cent above the minimum bid price.

The estimated breakeven price for a residential project based on a land price of $280 psf ppr should be around $550-580 psf, said CBRE’s Mr Tay. So the eventual selling price might be around $650 psf to $700 psf when the project is ready to launch, he added.

Source: Business Times, 20 Aug 2009

Strong demand for residential site

More signs of apickup in residential property sector

A PLOT of land for condominium development at Chestnut Avenue, just off the Bukit Panjang public housing estate, drew some 13 bids – with the highest coming in at $143.7 million or $280 per square foot (psf).

The top offer by Sunny Vista Developments and Hong Realty is more than double the minimum bid price of $62 million that had triggered the tender.

The site – which was the first residential site to be triggered under the Reserve List since last October – was launched for sale by Housing and Development Board (HDB) on Jul 23.

Frasers Centrepoint submitted the lowest bid at $77 million, according to HDB’s statement yesterday.

CBRE Research director Leonard Tay said the number of bids was “impressive” and reflected “the renewed interest and the growing positive outlook among developers for mass market residential projects”.

Units of several big-name developers and construction firms – such as Allgreen Properties, Ho Bee Investment, Sim Lian Group and Teambuild – have entered bids for the 99-year leasehold plot, which measures about 244,000 sq ft and has a maximum gross floor area of 513,000 sq ft.

CBRE expects the project to yield about 450 units. Based on the top bid, the research firm estimated that the breakeven price would be $550-$580 psf, translating to a possible selling price of around $650-$700 psf.

Source: Today, 20 Aug 2009

Bids pour in for Bukit Panjang condo site

THE fast-improving property market has prompted 13 developers to submit bids to buy a 99-year leasehold suburban land parcel in Bukit Panjang.

The top bid for the Chestnut Avenue condominium plot came in higher than expected at $143.68 million or $280 per sq ft (psf) of gross floor area. This was 132 per cent above the minimum acceptable bid of $120 psf of gross floor area.

The bid came from a joint venture between City Developments’ Sunny Vista Developments and Hong Leong Group’s Hong Realty. The 22,700 sq m of land can accommodate about 450 flats.

Some of the other top bids are: Sim Lian Land with a bid of $113 million and First Changi Development, a GuocoLand subsidiary, with a bid of $93.38 million.

Frasers Centrepoint put in the most conservative bid of $77 million or $151 psf of gross floor area – still within the range consultants had projected last month.

The ‘impressive’ number of bids reflects the renewed interest and the growing positive outlook among developers for mass-market residential projects, said CBRE Research director Leonard Tay.

This has been helped by the strong sales of suburban condominiums such as Meadows@Pierce in Upper Thomson and The Gale in Flora Road, experts said.

Still, the developers’ bids indicate that they remain cautious. ‘The pricing shows that the developers are realistic and not bidding at exceedingly high prices,’ said property expert Nicholas Mak.

Based on the top bid, the estimated break-even price for the project should be about $550 to $580 psf, said Mr Tay. This means the eventual selling price might be about $650 psf to $700 psf.

Currently, resale prices of the nearby 99-year leasehold Maysprings range from $480 psf to $600 psf.

Prices at nearby 999-year leasehold and freehold projects such as The Linear, Hazel Park Condominium and Dairy Farm Estate range from $560 to $650 psf.

In a separate development, a group of investors has put up three landed housing sites for sale. Two are in District 15 while the third is in Lornie Road in District 11. These sites, zoned for two-storey bungalow or semi-detached houses, were purchased about two to three years ago when the market was booming.

‘The property market growth is gathering pace and looking better these days. Prices have risen and there are not many sites around for sale,’ said Mr Steven Ming, director for prestige homes at Savills Singapore, which is marketing the sites. The tender closes on Sept 17.

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‘The property market growth is gathering pace and looking better these days. Prices have risen and there are not many sites around for sale.’
Mr Steven Ming, director for prestige homes at Savills Singapore

Source: Straits Times, 20 Aug 2009

Record 18 bids for prime Kaki Bukit industrial site

All tender offers exceed $5m reserve price; top bid hits $12.1m

A LAND parcel suitable for industrial use in the Kaki Bukit area has drawn a record number of bids.

The 115,342 sq ft plot in Kaki Bukit Road 2 was launched for public tender on July 14 after an unnamed party submitted an application bid of $5 million, or $43 per square foot per plot ratio (psf ppr).

Bidding ended yesterday with 18 offers on the table, all of them exceeding the reserve price of $5 million. This is the highest number of bids ever received for an industrial site, according to the Urban Redevelopment Authority (URA).

Previously, the highest number received was 14, for an industrial plot in Commonwealth Drive in November 2007.

The top bid of $12.1 million for the 30-year leasehold site at Kaki Bukit – zoned as a Business 2 development for a range of clean, light and general industrial uses – was made by privately held Kng Development.

This translates to a unit land price of $105 psf ppr and is 16.5 per cent more than the second-highest bid of $90 psf ppr submitted by the trio of Lee Siaw Ling, Low Khoon Huat and Ang Lai Huat.

It is also 142 per cent ahead of the application bid and beats the $72 psf ppr that Eastpoint Development paid for a 30-year leasehold industrial site along Kaki Bukit Road 3 in August 2007.

Mr Lim Kien Kim, Knight Frank’s head of business space (industrial), said the site drew a lot of interest as Business 2 sites are usually situated farther out in Tuas or Changi, and it is ‘very difficult to find a Business 2 site in the Kaki Bukit area’, which is considered more prime.

Mr Li Hiaw Ho, executive director of CBRE Research, said the response reflected the improving business sentiment.

‘The top six bids of above $75 psf ppr could be reflective of the bidders’ expectation that Singapore’s manufacturing sector will improve in the near future,’ he said. He noted that although Singapore’s economy was still shrinking, the pace of decline had slowed.

‘After eight months of contraction, the Purchasing Managers’ Index moved above the important 50.0 benchmark in May, indicating growth in the manufacturing sector. The index has since remained above the benchmark,’ he said.

Mr Tan Boon Leong, director of industrial sales at Colliers International, pointed out that the site is attractive to ‘a wide variety of end-users and a whole spectrum of industrialists’ because it is located in a mature industrial estate and has Business 2 zoning.

‘Moreover, it’s quite small, so in terms of quantum it’s very affordable. The level of interest goes to show or confirm that the economy seems to be turning from its lowest point now,’ he said.

The tender has not yet been awarded to any of the bidders. A final decision on the award will be made after the bids have been fully evaluated, said the URA.

Source: Straits Times, 13 Aug 2009

Kaki Bukit industrial site attracts 18 bids

(SINGAPORE) An industrial site along Kaki Bukit Road 2, put up for sale by the government, drew an impressive 18 bids by the close of tender yesterday.

The Urban Redevelopment Authority (URA) said that the highest bid received for the 30-year leasehold site was $12.1 million, more than double the minimum bid price of $5 million.

That highest bid, which works out to just under $105 per square foot per plot ratio (psf ppr), was placed by Kng Development, whose shareholders include Ng Teng Yeng, brother of property tycoon Ng Teng Fong; Kim Chan Wah and Ng Hock Lye.

Kng’s bid is 16.5 per cent above the second highest bid of $10.4 million, or $90 psf ppr, submitted by Lee Siaw Ling, Low Khoon Huat and Ang Lai Huat.

It is also higher than the $72 psf ppr which Eastpoint Development paid for a 30-year leasehold industrial site along Kaki Bukit Road 3 in August 2007.

This latest site, offered from the government’s reserve list, has an area of 1.07 ha and a gross plot ratio of one. CBRE Research says that the breakeven cost for Kng Development is likely to be $250 psf.

‘The robust response to the tender reflects the prevailing improving business sentiment,’ said Li Hiaw Ho, executive director at CBRE Research.

He noted that the top six bids were all above $75 psf ppr and ‘could be reflective of the bidder’s expectations that Singapore’s manufacturing sector will improve in the near future’.

Colliers International director (industrial) Tan Boon Leong said that the large number of bids received was not surprising as the ‘quantum amount is small’.

He thinks that the good response reflects greater confidence in the economy, as well as the fact that the plot lies within a mature industrial estate and is zoned for a Business 2 development, which means that it can be developed for a range of clean, light and general industrial uses.

Mr Tan also said that some of the bids were placed by contractor developers ‘who are probably more competent in judging their construction costs, and with prior experience, may thus be bolder when it comes to putting in bids’.

URA’s decision on the award of the tender will be made after the bids have been evaluated, and disclosed at a later date.

Source: Business Times, 13 Aug 2009

3rd site triggered for sale in 3 weeks

Developer commits to bid $40.5m for govt plot in Seletar Hills area

YET another government land parcel has been triggered for sale after a developer committed to bid at least $40.5 million for the site at the corner of Yio Chu Kang and Seletar roads.

The site is the third government plot triggered for sale in as many weeks after developers tendered bids on land in Dakota Crescent and Chestnut Avenue.

‘Developers are looking at the market two years down the road,’ said Jones Lang LaSalle’s head of South-east Asia research Chua Yang Liang.

‘We are still in a contraction mode but the global credit crunch has eased somewhat in Singapore and there is more certainty that we’ve seen the worst.’

The recent run-up in demand also points to a more positive mood, he said.

The latest land parcel is a 2.1ha commercial and residential site located within the established residential area at Seletar Hills and near the future Seletar Aerospace Park.

With a gross plot ratio of 1.4, it can generate a maximum permissible gross floor area of about 29,400 sq m.

The Urban Redevelopment Authority (URA) estimates the site can accommodate 225 housing units.

Shops and food and beverage outlets can be built on 4,500 sq m of commercial space within the proposed development.

Interest in the site is likely to be strong, given the high demand for suburban condos, experts said.

‘Given the current pace of sales for suburban condominiums now, the interest for land sites is high and the response to this site should be strong, with likely six to eight bidders,’ said the executive director of CBRE Research, Mr Li Hiaw Ho.

Bids are expected to range from $250 to $300 per sq ft per plot ratio, he said.

At that level, they will be about 95 per cent to 134 per cent above the trigger price, which works out to $128 psf per plot ratio.

Mr Li said new apartments on the site should fetch prices of between $700 and $750 psf.

This is based on the expected bids and the resale prices of some of the newer condominium units in the Yio Chu Kang area, which are going at between $600 and $700 psf.

The site was made available for sale via the reserve list system.

Under this sale method, a site goes up for tender only if developers indicate interest by committing to a minimum bid.

There had been much uncertainty in the market earlier, with developers showing little interest in buying sites, but the pick-up in recent months has been fast and furious.

Chesterton Suntec International research and consultancy director Colin Tan said the triggering of the Seletar site is another sign of the strong demand out there.

‘Even the developers feel that there is enough demand out there. It’s the market talking,’ said Mr Tan.

‘If the demand from investors is so strong…, then the Government should announce immediately that it will be activating the confirmed list once again at the next review,’ he said.

This should cool the market by telling investors that, with more supply coming up, the potential for higher profits will not be there, he said.

Under the confirmed list, sites are put up for tender at scheduled dates, regardless of developers’ interest.

The URA said it will launch the tender for the Seletar Road site in about two weeks. The date will be announced later.

Source: Straits Times, 8 Aug 2009

Project may add to charms of Seletar Hills

URA to put commercial and residential site up for tender later this month.

LOOKING for a new condominium project nestled in the quiet Seletar Hills Estate and in close proximity to roti prata outlets in the Jalan Kayu area, fish farms and The Animal Resort? A new condo with about 225 units could be ready for launch in about a year.

It will come up on a 99-year leasehold plot on the government’s reserve list that will be launched for tender by the Urban Redevelopment Authority in about a fortnight.

The 2.1 hectare site will also have a commercial component of up to 48,438 square feet gross floor area. Analysts say the commercial component, which could take the form of a small mall, would provide much needed shopping amenities in the vicinity.

The site at the corner of Seletar and Yio Chu Kang roads was once occupied by a wet market and HDB shops and was a convenient shopping haunt of Seletar Hills residents.

This is the third time in three weeks that a site on the government’s reserve list which can be developed into private homes has been triggered for launch after a successful application by a developer – reflecting developers’ hunger for land for mass-market condominium development in the face of a strong pick-up in home sales.

The identity of the developer that made the successful application for the launch of the latest site in Seletar was not revealed by the URA yesterday. However, the developer’s minimum bid price was made public – $40.5 million or $128 per square foot per plot ratio.

CB Richard Ellis executive director Li Hiaw Ho predicts strong interest in the plot with about six to eight bids likely, given the current pace of sales of suburban condominiums.

Top bids are expected to be in the $250-$300 psf ppr range – some 95 per cent to 134 per cent above the trigger price, he reckons.

‘Based on this land price, as well as the current resale prices of some of the newer condominium units in the Yio Chu Kang area which are between $600 psf and $700 psf, new apartments at this site should fetch prices of between $700 and $750 psf,’ he said.

However, Colliers International’s research and advisory director Tay Huey Ying expects just a handful of bids for the site, citing the lack of amenities in the vicinity and the fact that the site is not in close proximity to an MRT station. She also noted that older condos in the vicinity, such as Seletar Springs Condo, Serenity Park, Sunrise Gardens and Nim Gardens, fetched median prices of $480 psf to $520 psf in the first half of this year.

The site first appeared in the Government Land Sales Programme in the reserve list for second-half 2004.

At the time, it was much smaller, at 0.5 hectare. The plot was later expanded and in the second half of 2008 was moved to the confirmed list and slated for launch in November last year.

However, before that could happen, the government suspended confirmed list land sales in October last year during the global financial crisis. That was when the plot was moved to the reserve list where it had remained until it was triggered for launch.

Source: Business Times, 8 Aug 2009

Fragrance Group buys two more properties

PROPERTY and hotel firm Fragrance Group has bought two more properties, taking the total value of its acquisitions in the past month to close to $100 million. The company yesterday announced the acquisition of a 4,453-square-metre plot of land on Telok Kurau Road for $36.5 million and a 2,056-sq-m freehold site on Pasir Panjang Road for $23 million. The company’s two other acquisitions since mid-June cost a total of $33.51 million.

Fragrance Group chief executive Koh Wee Meng declined to comment on the identities of the sellers and on his company’s specific plans for the new acquisitions.

Construction and sale of the Telok Kurau development is expected to begin in the second half of FY2009. Meanwhile, said Mr Koh, tenancy at the 14 two-storey shophouses at the Pasir Panjang location will continue for a ‘minimum of one to two years’.

The $59.5 million purchases cap a busy week for the company. On July 21, it acquired the seven-storey Premier Centre from Hong Leong Group for $18 million, or $1,076 per square foot (psf). The office block is located at the corner of Beach Road and Tan Quee Lan Street.

Early last month, the company was awarded the tender for a Short Street hotel site by the Urban Redevelopment Authority. Its winning bid of $15.51 million, or $353 psf, was 76 per cent higher than the $8.8 million trigger price, and 11 per cent more than the next highest bid.

Fragrance Group has launched more than 20 landed properties and apartments to date. Additionally, its Fragrance Hotel chain has 20 branches islandwide, including a hostel on Dunlop Street. In its latest financial results, the group posted an 11.4 per cent increase in net profit for the second quarter ended June 30 to $17.7 million. Turnover rose 33.1 per cent to $79.5 million. The group’s shares closed six cents up at 61.5 cents yesterday.

Source: Business Times, 25 July 2009

Another reserve site draws bid

Dakota Crescent condo site gets $130m offer; Chestnut Avenue plot put up for tender today

FOR the second time in less than a week, the Government has received an offer for one of its condominium sites – after a 10-month drought during the recession in which it was unable to sell any residential land.

Yesterday, the Urban Redevelopment Authority said it has received a minimum bid of $130 million for a 1.7ha site at Dakota Crescent, near the upcoming Dakota MRT Station on the Circle Line.

This comes just three days after an unnamed developer offered $62 million for a land parcel at Chestnut Avenue in Bukit Panjang on Monday.

Both sites are on the Government’s reserve list, which means they are available for sale but are not put up for public tender until a developer pledges to put in a minimum bid.

The Chestnut Avenue site will be put up for tender today, while the Dakota Crescent site will be launched for tender in about two weeks.

The $130 million minimum bid that will be put in for the Dakota site works out to about $200 per sq ft (psf) of the potential gross floor area, which is about 650,000 sq ft, according to veteran property consultant Nicholas Mak.

He expects that when other bids come in during the tender, they could reach $350 to $370 psf of gross floor area, or $227.5 million to $240.5 million.

‘The site is fairly attractive because of its proximity to the upcoming Dakota MRT Station,’ he said, adding that the apartments that will be built on it can cater to HDB upgraders as well as investors on a tighter budget.

But Ms Tay Huey Ying, director for research and advisory at property firm Colliers International, said developers may not be overly keen on the site and probably only mid-sized and larger developers would bid for it.

She believes developers will stay cautious and limit their interest to sites that cost less than $150 million and that are located in the suburbs or the city’s fringes, where demand is strong now.

No state-owned residential land has been sold since September last year, when a site at the junction of New Upper Changi Road and Tanah Merah Kechil Avenue was awarded for $84 million.
Even that site was on the Government’s confirmed list, which means it was put up for sale at a fixed date regardless of whether developers had expressed any interest in it. The last time a developer has proactively put in a bid for a reserve-list site was almost two years ago, in November 2007.

But property consultants say developers could now be looking to replenish their land banks, given that they are now selling more new homes to buyers who are returning to the market in droves.
Developer GuocoLand, for instance, said yesterday that it has sold 117 of the 272 units in one of its projects, Sophia Residence in Mount Sophia.

It had released 38 units initially and sold them all, so another 100 units were made available during the project’s official launch last weekend, GuocoLand said in a statement. Selling prices range from $1,450 to $1,850 psf, and all the studio and two-bedroom units – which start from about 600 sq ft – have been sold.

Six in 10 of the buyers so far are Singaporeans. The rest are permanent residents as well as foreigners from Indonesia, Malaysia, South Korea, Taiwan, Myanmar, China, Australia and Europe, the developer said.

Only 20 per cent of buyers took up the interest absorption scheme that allows buyers to defer the bulk of their payments until their units are completed. The rest opted for the normal progressive payment scheme at a 2 per cent discount.

Source: Straits Times, 23 July 2009