BT : China's MCC Land leads bids for Sembawang site

Business Times - 09 Jun 2010

China's MCC Land leads bids for Sembawang site

It beat 6 others with bid of $131.7m, intends to build 300-unit condo

By UMA SHANKARI

MCC LAND, a unit of Chinese state-owned enterprise Metallurgical Corporation of China (MCC Group), has emerged as the top bidder for a residential plot at the corner of Sembawang Road and Canberra Drive.

The company beat six others with its top bid of $131.7 million, or $387 per square foot per plot ratio (psf ppr), the Housing and Development Board said yesterday.

MCC Land managing director Tan Zhiyong told BT that his firm intends to build a condominium with about 300 units on the plot. The break-even price is estimated to be around $600 psf and apartments could eventually sell for $700-$800 psf, Mr Tan added. The project will be launched in the first quarter of next year.

MCC Land's bid is higher than the $280-$310 psf ppr which analysts predicted the 99-year leasehold plot will fetch when it was launched in April. In fact, four of the seven bids came in ahead of the expected range.

'While the top tender bid of $131.7 million, or $387 psf ppr, from MCC Land is not exorbitantly high, it is still on the bullish side considering the potential influx of home supply as a result of the ramp up in the government land sales programme for the second half of 2010,' said Tay Huey Ying, Colliers International's director for research and advisory. The Ministry of National Development in May said that it will offer 27 residential sites - on which a total of 13,905 units can be built - for sale in the second half of this year.

The top few bids are 'bullish', echoed Li Hiaw Ho, executive director of CBRE Research.

Mr Li said that units in the new project could sell for around $700 psf. CBRE's data shows that in March and April this year, units in the nearby The Estuary went for between $660 psf and $800 psf. And in the resale market, units in Northwood (a freehold low-rise condominium) were sold at between $680 psf and $730 psf from January to April this year.

If the site is awarded to MCC Land, it will mark the group's second residential project in Singapore. It won an executive condominium site at Yishun Avenue 11 with a top bid of $127.8 million in a government land tender in March.

The company's top bid for this new site was 7 per cent higher than the second highest bid of $122.6 million ($360 psf ppr) from SP Setia Bhd of Malaysia. MCC Land's offer was also a whopping 55 per cent higher than the lowest bid of $85 million ($250 psf ppr) from Frasers Centrepoint.

Parent company MCC Group is a Fortune 500 company listed in both Shanghai and Hong Kong. Its business interests span engineering, construction, mining, paper-making, equipment fabrication and property development.

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