ST : Pasir Ris condo plot receives four tenders

Oct 1, 2010

Pasir Ris condo plot receives four tenders

By Joyce Teo

A CONDOMINIUM plot in Pasir Ris attracted four bidders, though the offers were relatively conservative.

The top tender - from a joint venture between Frasers Centrepoint and Far East Organization - came in slightly lower than expected at $151.38 million, or $334.85 per sq ft (psf) per plot ratio (ppr).

That was 7.6 per cent above the $140.69 million offered by a tie-up between Hoi Hup Realty, Sunway Developments and SC Wong Holdings.

Allgreen Properties was next with $131.89 million, with Meadows Investment, a firm owned by Tiong Aik Group executive director Neo Tiam Boon, in fourth place with $106 million.

Property experts said the response shows that developers who lodged bids were in two minds - cautious following the August cooling measures but fairly keen on this particular site even though it is not near an MRT station.

The 99-year leasehold plot at the junction of Pasir Ris Drive 3 and Pasir Ris Drive 4 is a 10-minute walk from the Downtown East lifestyle and entertainment hub. It has a site area of about 20,000 sq m and an allowable gross floor area of 42,000 sq m.

If successful, Frasers Centrepoint and Far East plan to build a 12-storey condo with 11 blocks comprising 400 to 450 units in all and aimed at HDB upgraders.

'The quantum of the bids indicates that the developers are optimistic about this site, given the strong sales at the recently launched NV Residences in Pasir Ris Drive 1, in addition to the sea view for units on the higher floors,' said CBRE Research executive director Li Hiaw Ho.

Before the August cooling measures were introduced, industry sources said the site might not attract strong bids as it was not near an MRT station. One forecast bids of between $350 and $390 psf ppr, although even that proved optimistic.

The bid from Frasers and Far East translates into a break-even cost of $650 to $680 psf, according to CBRE Research. Units in the new project on the site would possibly sell for about $800 psf.

NV Residences nearby reportedly sold around 350 units at the average price of $835 psf last month, it added.

Units in Livia, adjacent to NV Residences, were sold at between $720 and $840 psf in the July to September period.

And units at Oasis @ Elias in Elias Road sold for between $650 and $740 psf in the same period, noted Mr Li.

The Frasers and Far East joint offer was similar to the highest bid some executive condominium sites received in the first half, noted Cushman & Wakefield's senior manager of research, Asia Pacific, Mr Ong Kah Seng.

Lower prices are ultimately beneficial for developers as the break-even price will be lower, he added.

The potential for better profit margins is there should prices not fall significantly, he said.

Developers are increasingly cautious given an expected economic slowdown after robust first-half growth, uncertainties in the wider economy and a temporary slowdown in buying interest, he added.

The HDB said it will evaluate the tender bids and announce the results within two weeks.