Wednesday, June 8, 2011

Lukewarm interest in condo site

A RESIDENTIAL site for private homes in Woodlands has fetched a top bid of $152 million in a subdued three-cornered contest among developers.

This came as the Housing Board kept up its drive to boost flat offerings this year by releasing a new site for design, build and sell scheme (DBSS) flats yesterday.

Experts say a move to lift the number of build-to-order HDB flats launched this year to 25,000 would have weighed on developers' minds as it could siphon demand away from the private market.

The lukewarm interest from developers, however, was due more to the site's 'average' attributes, they added.

A joint venture between Fragrance Group and Aspial Corp put in the top bid for the site at the junction of Woodlands Avenue 2 and Rosewood Drive. The bid worked out to $367 per sq ft (psf) per plot ratio (ppr).

They said in a statement that, if awarded the site, Fragrance will hold a 60 per cent stake in a special purpose vehicle while Aspial will hold the remaining 40 per cent to jointly develop the project.

Second-placed Far East Organization and Sekisui House were just 1 per cent behind with a bid of $150 million - or $363 psf ppr. EL Development was third with a $120 million bid, or $291 psf ppr.

The 99-year leasehold land parcel has a maximum gross floor area of 38,333 sq m and can accommodate a five-storey condo with about 390 units.

Ms Chia Siew Chuin, director of research and advisory at Colliers International, said competition from existing and upcoming projects in the vicinity could have contributed to the tepid response. These include the newly completed Rosewood Suites as well as Far East Organization's new project Woodhaven at the junction of Woodlands Avenue 1 and Rosewood Drive.

Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, noted that the site's top bid is still 10 per cent higher than that for Far East's site - which was tendered with a winning bid of $333 psf ppr in November last year - suggesting firm suburban residential land prices.

CB Richard Ellis (CBRE) Research executive director Li Hiaw Ho expects the new project to break even at $700 to $730 psf while Colliers' Ms Chia expects the units to sell at about $780 to $800 psf.

'Sub-sales of units in Rosewood Suites were transacted at between $730 psf and $810 psf in the March to May period this year,' Mr Li said.

The HDB yesterday launched the sale of a site at the junction of Fernvale Link and Sengkang West Avenue. The 22,706 sq m site can yield about 790 flats.

HDB said it will launch another DBSS site at Bendemeer Road with about 700 units later this month.

PropNex corporate communications manager Adam Tan expects the latest site to be sold for $650 to $750 psf ppr.

The site is likely to be popular with developers and buyers as Sengkang is a rapidly maturing estate with shopping centres and established schools nearby, he added. 'In particular, DBSS flats will present the sandwich group with increased housing options, which will also help ease the demand for public housing as the sandwich group does not have to compete with households earning less than $8,000 for resale flats.'

Separately, another development, Olina Lodge at Holland Hill, launched its collective sale with an indicative price of $225 million yesterday. This works out to $1,575 psf ppr for the freehold site of 7,831 sq m, inclusive of a 10 per cent balcony allocation. Marketing agent DTZ said the 67-unit, four-storey walk-up property can be redeveloped into a 12-storey project with a gross floor area of 134,862 sq ft, according to the 2008 Master Plan.

Owners are expected to get about $2.95 million to $4.9 million each in proceeds - some 65 per cent more than their units' existing value, DTZ added.

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