Saturday, July 9, 2011

Day of contrasts for EC market

a day of contrasts in the executive condominium (EC) market yesterday.

Even as caution reigned at a state tender for a Punggol EC site which drew just three bids with the top bid coming in below earlier expectations, City Developments Ltd (CDL) managed to sell slightly over 150 units on the first day of sales at its Blossom Residences EC project at Segar Road in the Bukit Panjang area. This pace of sales would be in line with the previous EC launch of Belysa in late May, say market watchers.

Some analysts declared that the cautious bidding mood for 99-year private condo sites at recent state tenders has started to filter through to the EC market. The three bids for an EC plot at Punggol Way/ Punggol Field yesterday was the poorest turnout since tenders for EC sites resumed last year. Also, the top bid of $270.08 per square foot per plot ratio (psf ppr) for the Punggol plot yesterday was lower than the $300-350 psf ppr which most property consultants had predicted for the site when it was launched in late May.

Another marker of the weakening sentiment among developers of EC land was that yesterday's top bid - which came from a joint venture between Frasers Centrepoint and Keong Hong Construction - was 12 per cent below the $308 psf ppr that NTUC Choice Homes and Chip Eng Seng paid for a comparable EC site in June last year on which they are now developing the Prive project. That tender drew five bids.

Credo Real Estate executive director Ong Teck Hui said that the two sites are quite similar in terms of distance to the Punggol MRT/LRT Station, bus interchange and amenities.

'The latest result just shows the cautious bidding at this tender. With several ECs under active marketing and some more to be launched, plus new EC sites in the second-half 2011 Government Land Sales Programme, the potential supply has become more significant, and would have deterred keen participation and optimistic bidding in this tender,' Mr Ong added.

ECs are a hybrid of public and private housing with initial buyer eligibility and resale restrictions which are completely lifted 10 years after the completion of an EC project. Mr Ong reckoned that developers may also have preferred to err on the side of caution for yesterday's tender, given the uncertainty about the impact that an expected increase in income ceiling for buyers of Build-to-Order public housing flats and the significant BTO supply for this year will have on other segments of the housing spectrum including ECs. CBRE Research executive director Li Hiaw Ho estimated that Frasers Centrepoint/Keong Hong's top bid for yesterday's tender would result in a breakeven cost of about $570-600 psf for a new project. Prive was sold at a median price of about $700 psf when it was released last December.

'Another EC project, River Parc at Punggol Drive/Punggol East, is currently open for application and the average price is around $650 psf,' Mr Li added.

Frasers Centrepoint and Keong Hong's top bid was just 0.4 per cent above the second highest bid of $268.90 psf ppr from Chip Eng Seng unit CEL Development. The lowest offer, from EL Development, was $217.94 psf ppr. Frasers Centrepoint said that its scheme entails about 700 units, over 10 17-storey blocks. The developer is no newbie to the area - it has a stake in a retail and residential project at Punggol Central.

Over at Segar Road, CDL has priced its 602-unit Blossom Residences EC at $690 psf on average for the normal progress payment scheme. Those who opt for the deferred payment scheme will pay 3 per cent more.

Two-bedders range from 753-969 sq ft and cost $548,000 to $590,000. 'Compact' three-bedders start from 969 sq ft and $659,000 while normal three-bedders begin at 1,055 sq ft and $723,000.

Blossom Residences also features dual-key units. A four-bedroom dual-key unit of 1,356 sq ft is priced from $931,000. Penthouses (1,615-2,088 sq ft) cost $1.088 million to $1.276 million.

In the private housing segment, Cheung Kong Holdings today previews its Thomson Grand project opposite Singapore Island Country Club. The posh sales gallery cost over $8 million and incorporates more than 100,000 Swarovski crystals, including the chandelier centrepiece. The sales gallery embodies certain features of the project's Faberge Clubhouse, which will resemble a bejewelled egg.

The initial batch of 50 units in the 361-unit project comprises two, three and four-bedroom apartments as well as strata terrace houses.

Cheung Kong said that the terrace houses, with strata areas of 5,102-6,566 sq ft, will be priced at $3.5-4.6 million while apartment prices will range from $1.4 million for a two-bedder to $3.8 million for a four-bedroom unit. It said that all apartments will cost above $1,400 psf. However, sources suggest that $1,400 psf is more likely to be the average price.

Cheung Kong clinched the 99-year leasehold site for $533 psf ppr in late 2009.

Thomson Grand is being marketed by CBRE and Huttons, while CBRE and ERA are marketing Blossom Residences.

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