Tuesday, April 5, 2011

Three smaller freehold sites up for sale

THREE small- to mid-sized developments were put up for sale yesterday.

Analysts say this indicates property firms are confident that demand remains strong among boutique developers seeking smaller-sized plots.

Two of the three developments are less than 30,000 sq ft in size; the other has a size of about 70,000 sq ft.

Credo Real Estate executive director Yong Choon Fah said many big developers prefer government land sales to the collective sale market, leaving the latter open to smaller firms.

'Boutique firms are still on the hunt for smaller developments which they can handle on their own, so demand is still there,' she said.

Yesterday, Credo put the 20,226 sq ft Haig Mansions in Haig Road up for collective sale. The freehold site has a gross floor area of 28,317 sq ft and can be redeveloped to house 45 apartments of an average of 600 sq ft each.

Ms Yong said the break-even price is about $1,150 per sq ft (psf), given the reserve price of $21 million. The tender closes on May 11.

Savills launched a 28,676 sq ft freehold site in Lim Tua Tow Road, off Upper Serangoon Road. The site, which currently accommodates three single-storey houses, can be developed into a five-storey development with 43 apartments of about 850 sq ft each.

Savills director Suzie Mok said the indicative price is $26 million, with a break-even price of $1,250 psf.

'The good thing about this is that it's not an en bloc but sold by a family which owns the entire site. So there is less hassle than an en bloc sale process,' she said.

The biggest of the trio is Pelikat Mansions, a freehold three-storey commercial cum residential block in Jalan Pelikat, off Hougang Avenue 1.

Marketing agent ERA Realty Network said the 69,552.66 sq ft site has an achievable gross floor area of 208,657.9 sq ft and can be redeveloped into three-and-a-half-storey blocks. It said 80 per cent of the owners have signed the agreement to sell and are looking for at least $70 million. The tender closes on May 5.

In a report, Nomura analysts said the appetite for residential sites remains strong, citing a collective sale site in Tanjong Rhu being snapped up by a small Chinese developer.

The 23,020 sq ft freehold site called Fortredale cost about $65 million.

'We think the Fortredale developer will try to achieve a higher unit price by offering smaller units,' said Nomura, which estimates that the break-even price for the site is between $1,858 psf and $1,971 psf.

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