ST : Serangoon residential site draws just 4 bids

Nov 10, 2010

Serangoon residential site draws just 4 bids

Top bid of $156.8m from joint venture which plans to build 470 units

By Esther Teo

A JOINT venture linking Frasers Centrepoint, Far East Organization and Japanese company Sekisui House has topped a residential site tender with a bid of $156.8 million.

The joint venture's offer of $320 per sq ft (psf) per plot ratio (ppr) for the site at Upper Serangoon View was just 3 per cent higher than Centurion Re's bid of $152.9 million, or $312 psf ppr.

Centurion Properties - which has a majority stake in the firm developing Kovan Residences - is controlled by former star stockbroker Han Seng Juan and his cousin David Loh.

Only four bids were received during the tender period for the 13,000 sq m site. The others were from units of CapitaLand, with a bid of $147.8 million, and City Developments, which lodged the lowest bid of $136.4 million, or $278 psf ppr.

The 99-year leasehold site earmarked for condominium housing has a maximum gross floor area of 45,501 sq m and can house an estimated 540 units, the Housing Board said yesterday.

It is near Punggol Park and Holy Innocents' High School. Shopping malls Hougang Plaza and Hougang Central's Hougang Mall, which is close to the Hougang MRT station and bus interchange, are just a short drive away.

A joint statement from the highest bidders said the site would be attractive to home buyers, given that it will have views of the adjacent Sungei Serangoon and the nearby Punggol Park.

The companies plan to build about 470 units in eight blocks of up to 17 storeys each.

Sekisui House, which has its headquarters in Osaka, is the largest home builder in Japan, and it will bring its expertise in creating high-quality buildings to this project, the statement said.

CB Richard Ellis Research executive director Li Hiaw Ho said that the four bids submitted showed moderate interest in the plot.

He noted that the top bid was within expectations and reflected a break-even cost of around $650 to $680 psf. He predicted that the units could possibly sell at $800 to $850 psf.

Nearby condo projects such as Evergreen Park and Rio Vista were sold in the resale market at between $600 and $720 psf in the July to September period, he added.

Mr Ong Teck Hui, Credo Real Estate head of research and consultancy, said that the site was in the same league as the last four land tenders for private developments, which saw winning bids of between $320 and $350 psf ppr.

But he noted that the Serangoon site's top bid of $320 psf ppr was a shade lower than the previous Hougang Avenue 7 tender at $340 psf ppr.

This could be due to the site being slightly further away from Hougang Central, where the amenities, MRT station and bus interchange are located, he said.

'This pattern of bidding still reflects caution on the part of developers who are mindful of the continuity of sites coming in,' Mr Ong added.

'There's a government land sales (GLS) tender closing every week into mid-December and the GLS programme next year can be expected to throw up a wide selection of sites when it is announced.'

esthert@sph.com.sg