ST : Joint venture bids $165m for 99-year site in Yishun

Aug 25, 2010

Joint venture bids $165m for 99-year site in Yishun

Hoi Hup Realty and Sunway Developments will cite nearby golf course as key selling point

By Joyce Teo

A JOINT venture which has emerged as the top bidder for a condominium site in Yishun is highlighting its location next to a golf course as a key selling point.

The tie-up between Hoi Hup Realty and Sunway Developments put in the best of seven bids for the 99-year leasehold land parcel at Miltonia Close, at the fringe of Yishun Town Centre.

The bid of $165 million, or $405.5 per sq ft per plot ratio (psf ppr), beat market expectations and came in about 31 per cent above the next bid.

Hoi Hup director Wong Sjew Hung told The Straits Times: 'We see the potential of the site. It is really hard to find a site next to the golf course here.

'We plan to build a five-storey condominium with 380 units. It will be mainly two- and three-bedroom units suitable for families.'

A construction firm, Master Contract Services, placed the second-highest bid of $126 million, or $309.68 psf ppr. The third-highest bid from a joint venture between Frasers Centrepoint and Orchard Parade Holdings came very close at $125.32 million, or $308 psf ppr.

The lowest of the seven bids came from Intrepid Investments - at $97.88 million, or $240.56 psf ppr.

Analysts had projected bids of $270-$350 psf ppr.

The site, which can be developed into a strata housing community or a condominium project, is on the boundary of the Orchid Country Club golf course. It is not near an MRT station, but it does enjoy an unblocked view of Lower Seletar Reservoir.

CBRE Research director Leonard Tay said the location will appeal to people who prefer a quiet neighbourhood, lots of greenery and a serene environment.

Private residential developments nearby include The Shaughnessy, Lilydale executive condominium, Orchid Park Condominium and The Estuary (under construction).

Mr Tay said the top bid could reflect a break-even cost of about $700-$750 psf should a low-rise condo be developed. And condo units in this new project could possibly sell above $800 psf, he said.

By comparison, units at The Estuary, which was launched in April, transacted at $650-$850 psf from April to August.

In the same period, units at the 16-year-old Orchid Park Condominium were sold at $550-$700 psf, said Mr Tay.

An industry expert said the tender response shows that, apart from the top bidder, the other developers are now more cautious in bidding for sites given the record upcoming supply.

But developers are still hungry for land as their landbanks are fast depleting, he said.

Ms Wong said this project - if the joint venture is awarded the site - will be Hoi Hup's fourth with Sunway Developments. The joint venture's previous project was The Peak @ Toa Payoh.