BT : Chip Eng Seng and partner plan EC project

Business Times - 16 Jun 2010

Chip Eng Seng and partner plan EC project

The developers put in highest bid for Punggol site

By UMA SHANKARI

NTUC Choice Homes and Chip Eng Seng intend to build a 600-unit executive condominium (EC) on a land parcel in Punggol sold by the state.

The developers' joint bid of $223.7 million, or $308 per square foot per plot ratio (psf ppr), trumped four others at the close of the government tender yesterday.

If awarded the 99-year leasehold site, the companies plan to build a 17-storey, 600-unit residential project with full condominium facilities.

It will be the first EC development in Punggol. EC units are initially sold with eligibility and ownership restrictions similar to HDB's public housing flats, but will be converted to private housing after 10 years.

The break-even price is estimated at around $600 psf and flats will be sold at the 'prevailing market price', the companies said.

NTUC Choice Homes will take a 60 per cent stake in the project while Chip Eng Seng will hold the remaining 40 per cent. The two companies have jointly developed three projects to date - condos at Upper East Coast (Riviera Residences) and Ang Mo Kio (Grandeur 8) as well as an EC at Bishan called Bishan Loft.

'We are excited because this will be the first executive condo in Punggol,' Chip Eng Seng group chief executive Raymond Chia told BT. 'We are also delighted to partner NTUC Choice Homes again and emerge together as the top bidders for this site.'

The top bid of $308 psf ppr is within expectations and units in the upcoming project could possibly sell at about $650 psf, said CBRE Research director Leonard Tay.

CBRE's data shows that in the resale market, units in Park Green, The Rivervale and The Florida fetched $500-$620 psf between January and May 2010.

But while the top bid was within expectations, the large land supply promised for the second half 2010 government land sales programme is beginning to have an impact, analysts noted. This is the fourth EC site to be sold by the government this year.

'The number of bidders in the four EC land tenders have slowly declined from 11 bidders in the tender that closed on March 4 to the present five bidders, as the developers' appetite for land is gradually being satisfied,' said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

NTUC Choice Homes' and Chip Eng Seng's bid was just 4 per cent higher than the second highest bid of $215.2 million or $296 psf ppr from Hoi Hup Realty and Sunway Developments. The top bid was also 28 per cent higher than the lowest bid of $174.4 million or $240 psf ppr from Frasers Centrepoint.

The EC plot at the corner of Punggol Field and Punggol Road was launched for sale earlier this year after an unnamed developer agreed to bid at least $147.7 million or $203 psf ppr for it.

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