Wednesday, June 13, 2012

CDL makes top bid for Buangkok condo plot

Business Times: Wed, Jun 13
THE state tender for a 99-year-leasehold private condo plot about 100m from Buangkok MRT Station has fetched a top bid above expectations.

However, a participation rate of just five bids could point to the playing field in the broader Punggol, Sengkang and Buangkok vicinity getting crowded, suggest some market watchers.

Developers may also be saving their bullets for tenders for choicer sites - at Farrer Drive and Pheng Geck Avenue (near Potong Pasir MRT Station) - closing later this month.

At yesterday's Buangkok tender, City Developments Ltd (CDL) unit White Haven Properties bid $301 million or $508.22 per square foot per plot ratio (psf ppr), slightly exceeding the upper range of forecasts - $320-$500 psf ppr - for the site's top bid made by property consultants polled by BT when the plot was released in April. The plot can potentially yield about 600 homes.

CDL's bid yesterday was 3.7 per cent higher than the second highest offer of $490.12 psf ppr from a tie-up between Frasers Centrepoint unit Opal Star and Lum Chang's Binjai Holdings - which in turn was followed closely by UOL unit Flamegold's offer of nearly $481 psf ppr.

Incidentally, White Haven was the second highest bidder a fortnight ago for a 99-year condo site near Sengkang MRT Station, one stop away. That tender too drew just five bids, with the winning bid from EL Development of nearly $528 psf ppr - higher than yesterday's top bid for the Buangkok plot.

Some market watchers note that while Sengkang is further from town, it boasts superior amenities, most notably Compass Point mall.

Credo Real Estate executive director Ong Teck Hui said bids at yesterday's Buangkok tender were still firm. "The top three bidders probably see strong demand for this site, being the first new private residential site near Buangkok MRT Station," he added.

"However, the (broader) Sengkang/Punggol area has a lot of new projects, some being marketed and others that will come up on sites sold in the past year. So the playing field is quite crowded," Mr Ong said.

This could well explain the similar outcome for the Sengkang tender, which closed on May 31.

Agreeing, SLP International executive director Nicholas Mak said he had expected the Buangkok and Sengkang sites, which are located near MRT stations, to have fetched around 7-10 bids each.

CBRE executive director Li Hiaw Ho estimates CDL's break-even cost for a new project on the Buangkok site at $900-950 psf. Pricing for the project would be similar to that of The Luxurie, near Sengkang MRT Station, which is selling at $1,040 psf on average, he added.

CDL's spokesman said yesterday that it plans to build a project of about 16 storeys on the Buangkok plot, adding that it sees "great potential and demand for this project in this burgeoning estate". It is familiar with the vicinity; it is developing H20 Residences at Sengkang West Avenue/ Fernvale Link...
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Martin Koh/ Sherry Tang
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