ST : 99-yr Simei plot draws 18 bids

May 12, 2010

99-yr Simei plot draws 18 bids

Analysts expect average selling price of $1,000 psf

By Joyce Teo

ANOTHER suburban land tender has generated massive interest, with a staggering 18 developers plunging in and offering top dollar for the site.

The 99-year leasehold 1.18ha site, which can accommodate an estimated 250 flats, is in Simei St 3, right across the road from Eastpoint Mall and Simei MRT station.

Chip Eng Seng's CEL Development has emerged the top bidder with a much higher-than-expected bid of $152.69 million or $523 per sq ft per plot ratio (psf ppr).

This price will translate to a break-even level of $860 to $900 psf, and an average selling price of around $1,000 psf if the project is launched in the first half of next year, said CBRE Research.

Mr Steven Tan, executive director, residential, at OrangeTee.com, expects a slightly higher break-even and a possible final selling price of $1,100 to $1,150 psf.

CBRE Research's executive director, Mr Li Hiaw Ho, said the 18 bids garnered represent 'an all- time high level of interest' not seen in government land sales tenders in the last five years for a site of this size and with a value of more than $100 million.

'This demonstrates the strength of a location that is close to an MRT station as well as developers' confidence in the residential market going forward,' he said.

Other bidders included Far East Organization, MCL Land, Keppel Land, Hoi Hup Realty, UOL and Ho Bee Investment. Their bids were also impressive.

CEL's bid was just 3 per cent above Frasers Centrepoint's bid of $148 million or $507 psf ppr. Sim Lian Land put in the third highest bid of $142.5 million or $488 psf ppr.

In fact, apart from the bottom three, all other bids came in above expectations.

Allgreen Properties came in last, with a bid of $113.8 million or $389.78 psf ppr.

Property experts had earlier tipped bids of just $320 to $410 psf ppr, which would translate to likely selling prices for flats of $750 to $850 psf.

According to CBRE Research, between January and April this year, typical new units - the three- to four-bedroom units - in Double Bay Residences in Simei St 4 were sold for between $660 psf and $750 psf.

In the resale market, units of such sizes in Modena and Tropical Spring in the vicinity were sold for $615 psf to $780 psf over the same period, it noted.

'The tender results show that developers are still very hungry for land. Those who have not bought any recently will have to be very aggressive,' said Mr Tan.

A recent tender for a land parcel in Tampines drew 16 bids while another tender for a plot next to Lakeside MRT station drew 14 bids and a top bid of $499 psf ppr.

At that price, the Lakeside plot may sell for close to or above $1,000 psf, industry sources had said.

Mr Tan said such prices for suburban projects are no longer very surprising, after The Vision in the West Coast set a new benchmark.

The Vision had sold well, despite it being priced at above $1,000 psf.

The winning tender for the Simei site will be announced later by the Urban Redevelopment Authority.

joyceteo@sph.com.sg