ST : Petir Road residential site draws nine bidders

Oct 8, 2010

Petir Road residential site draws nine bidders

By Joyce Teo

INTEREST in a residential development plot at Petir Road, right next to the sold-out Tree House project, has been strong, with nine bids submitted for the site.

The bid prices indicate that developers are optimistic about the location, given that the 429-unit Tree House was quickly snapped up in the second quarter, said CBRE Research director Leonard Tay.

'Tree House showed there's good demand for this location, even though it is not near any MRT station,' said DTZ's South-east Asia research head, Ms Chua Chor Hoon.

Still, Wing Tai's Wincheer Investment topped the tender with a bid of $177.4 million - or $345 per sq ft per plot ratio - that is within expectations. This is just 2 per cent above Sim Lian Land's bid of $173.8 million, or $338 psf ppr.

An industry expert had expected bids ranging from $320 to $355 psf ppr, which works out to between $164.5 million and $183 million.

The 2.3ha site was launched for sale a day after the Government introduced measures to curb property speculation on Aug 30.

On that same launch day, four other sites - all of which are also near projects that have been launched in the past year or so - were made available for sale should developers be keen on them.

The 99-year leasehold Petir Road site has a maximum gross floor area of 47,763 sq m and can yield about 430 flats.

Other bidders include Low Keng Huat's Kwan Hwee Investment and Partner Vision Holdings' Plan Achieve.

City Developments - which is developing Tree House together with Hong Realty - made its bid through Sunmaster Holdings. It came in fifth with a bid of $167.6 million or $326 psf ppr.

Allgreen Properties put in the second-lowest bid of $140.9 million or $274 psf ppr, while construction firm Teambuild Land made the lowest bid of $103 million or $200 psf ppr.

Mr Tay said the top bid translates to a break-even cost of $680 psf to $700 psf and units in the new residential project may sell for above $800 psf. DTZ's Ms Chua said the successful developer could price the units at some $800-$830 psf, close to the average launch price of $830 psf at the Tree House in April this year.

Colliers International's director of research and advisory, Ms Tay Huey Ying, said the top bid came in within the market range seen for recent tenders. 'In general, developers are more cautious now as their bids are more subdued,' she said.

CBRE Research noted that units in Mi Casa, a new project at Choa Chu Kang Avenue 3, sold for $700-$850 psf in the July-September period this year. And in the resale market, units in the 12-year-old Maysprings nearby sold at between $560 psf and $760 psf over the same period.

The Petir Road site is on the south-eastern fringe of Bukit Panjang HDB estate, about 10 minutes' walk from the Pending LRT station. When the Downtown Line 2 is completed in 2015, the nearest station will be Hillview station a short drive away, said CBRE Research.