KepLand bid tops tender for Lakeside plot
Unit places bid of $498.98 per sq ft of potential gross floor area
By KALPANA RASHIWALA
IT WAS an interesting tender result yesterday for a 99-year leasehold private condominium plot near Lakeside MRT Station, with two listed property groups in the Temasek stable emerging at both ends of the table of bidders.
A unit of Keppel Land placed the top bid of $498.98 per square foot of potential gross floor area while a unit of CapitaLand was the lowest bidder. Its bid of $273 psf per plot ratio (psf ppr) was about half of KepLand's bid.
The highest offer from KepLand was significantly above market expectations and 15.2 per cent higher than the second highest offer, from a unit of Metallurgical Corporation of China.
Yesterday's tender, conducted by Urban Redevelopment Authority, drew a total 14 bids, reflecting developers' continuing hunger for land.
Analysts' estimates of the breakeven cost for a new condo project based on KepLand's bid price range from $800-870 psf. A property developer, who reckons KepLand will break even at at about $870 psf, guesses that the developer would be eyeing an average selling price of about $1,000 psf.
While that exceeds current pricing in the area, further price appreciation could allow KepLand to achieve such a price level by the time it is ready to launch the project next year, especially if it adopts the tried-and-tested industry formula of building a greater proportion of smallish units to achieve a higher per square foot pricing.
The 1.6-hectare plot can be developed into about 525 units, according to an earlier release by URA but this figure would increase if KepLand opts to build a higher number of small units.
According to CB Richard Ellis, over the past four months, subsale units of The Caspian next door have been transacted at $650-800 psf. Resale units at The Lakeshore condo nearby have been trading at $680-900 psf.
'This location will attract upgraders from the nearby private and public housing estates as well as employees from the surrounding industrial employment centres and Nanyang Technological University,' CBRE executive director Li Hiaw Ho points out.
While the site tendered yesterday currently enjoys unobstructed views of Jurong Lake, this is not guaranteed in future as there is a state site just in front of it. 'When developed, it could block views at least on the lower levels of the proposed condo on the plot just tendered,' said a market watcher.
For KepLand, it will mark its first acquisition of a pure residential site in Singapore in six years.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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