Wednesday, November 16, 2011

Milton Close plot draws top bid of $138.9m

Business Times: Wed, Nov 16
A JOINT bid from TG Development and Master Contract Services has topped the state tender for a private condo site at Miltonia Close, in the Yishun area, that closed yesterday.

Their bid of $138.9 million or about $364 per square foot per plot ratio (psf ppr) for the 99-year leasehold land parcel was in line with market expectations. There were eight bidders in all.

Chia Siew Chuin, director of research & advisory at Colliers International, noted that the top bid for the Yishun site is some 10.3 per cent lower than the $405.53 psf ppr achieved for the nearby Miltonia Residence plot that was sold in September last year, reflecting a more cautious outlook.

SL (Serangoon) was the next highest bidder, coming in about 6 per cent behind the top offer, with just over $131 million or $343 psf ppr.

The lowest bid came from Hangzhou Headway Real Estate and Hua Yuan Organisation - $119.2 million or $312 psf ppr.

CBRE Research executive director Li Hiaw Ho noted that the site drew a fairly strong response, given the eight bids, and attributed the keen interest to the recent healthy take-up of new projects in Yishun such as The Miltonia Residences and Eight Courtyards.

Notably, during the period of July to October, caveats were lodged for units in The Miltonia Residences and Eight Courtyards at $870 psf and $818 psf respectively.

'The top bid of $138.9 million or $364 psf ppr will translate to a breakeven cost of around $750 psf,' said Mr Li.

'When launched, units in this new project (at Miltonia Close) can fetch around $850 psf to $900 psf. The narrow range of the eight land bids from $364 psf ppr to $312 psf ppr signals that land prices are stabilising.'

Concurring, Credo Real Estate executive director Ong Teck Hui said: 'This tender shows that interest for suburban residential sites remains keen among developers in spite of a more uncertain economic outlook.'

However, Mr Ong highlighted that developers could have been spurred by promising sales numbers clocked in September, when 1,631 private residential units were sold, as well as seemingly strong buying momentum in new suburban private residential projects.

Location-wise, Mr Li said, the tender site is situated on the fringe of Yishun New Town and the future development is likely to be a high-rise project of 350-400 apartments, where units on higher floors will have a view of The Orchid Country and Golf Club and the Lower Seletar Reservoir.

Source: Business Times © Singapore Press Holdings Ltd

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Martin Koh/ Sherry Tang
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