BT : New benchmark set for condo land in Yishun area

Business Times - 25 Aug 2010

New benchmark set for condo land in Yishun area

Hoi Hup-Sunway tie-up puts in top bid of $405.53 psf ppr or $165m

By KALPANA RASHIWALA

A NEW benchmark has been set for condominium land in the Yishun/Semba- wang area. A state tender that closed yesterday for a 99-year leasehold plot at Miltonia Close next to Orchid Country Club fetched a top bid of $405.53 per square foot per plot ratio (psf ppr) or $165 million from a tie-up between Hoi Hup Realty and Sunway Developments.

The joint bid was 31 per cent higher than the next highest offer, placed by Master Contract Services, whose activities are listed as builders, contractors, developers and steel structural component makers.

Yesterday's tender drew seven bids, suggesting developers' appetite for choice sites is still healthy. Earlier this month, an executive condo plot at Jurong West did not draw a single bid - which some analysts blamed on its unattractive location.

At yesterday's tender, the lowest offer, from Hong Leong Group unit Intrepid Investments, was $240.56 psf ppr.

Market watchers note that the $405.53 psf ppr offered by Hoi Hup-Sunway surpassed the $387 psf ppr winning bid for a condo plot at Sembawang Road/ Canberra Drive at a state tender in June.

A Hoi Hup spokeswoman, explaining the group's 31 per cent margin at yesterday's tender, said: 'This is a rare site on mainland Singapore - next to a golf course, overlooking the (Lower Seletar) reservoir. We can see its potential.'

Hoi Hup and Sunway hope to build a five-storey condo with about 380 units comprising one- to four-bedroom units with as many units as possible having golf course views, she added.

Most of the units will be two- and three-bedders, targeting families.

The project is likely to be launch ready in about nine months to a year.

The allowed uses for the site are strata landed housing or condo housing or a flats development.

The Hoi Hup spokeswoman said the group's breakeven cost would be slightly above $700 psf.

'Our associated company, Straits Construction, will be doing the construction,' she added.

CBRE Research director Leonard Tay estimates that units in a new condo project on the site 'could possibly sell for above $800 psf'.

Another analyst suggests Hoi Hup and Sunway could be eyeing an average price of about $900 psf.

Market watchers note that a short distance away, The Estuary was launched in February this year at an average price of $750 psf. MCL Land is developing the project on a site it clinched for $350 psf ppr at a March 2008 tender. MCL's winning bid in that contest was a whopping 68 per cent more than the next highest bidder.

MCL's unit Superport also bid at yesterday's tender, emerging in fourth place at $285.10 psf ppr.

Frasers Centrepoint teamed up with Orchard Parade Holdings for a $308 psf ppr bid. Other bidders include Allgreen Properties ($267.60 psf ppr), and Ho Lee Group ($253.15 psf ppr).

Yesterday's joint top bid by Hoi Hup and Sunway will mark the duo's fourth collaboration.

They are developing two public housing projects under the Design Build and Sell Scheme as well as a 473-unit freehold condo at Jalan Senang, Vacanza@East, expected to be released soon.

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