Friday, July 13, 2012

Potong Pasir site may see hot contest


Business Times: Thu, Jul 12

THE latest 99-year leasehold site in the vicinity of Potong Pasir MRT Station to be released by Urban Redevelopment Authority (URA) is expected to be hotly contested, because of the appeal of mixed-development projects, according to most analysts.

Analysts polled by BT yesterday evening predict 7-15 bids with the winning bid forecast in a wide range - $580-750 per square foot per plot ratio (psf ppr).

Yesterday evening, Urban Redevelopment Authority announced that an unnamed party has successfully applied for the site's release from the reserve list with an undertaking to bid at least $154.474 million or $500 psf ppr at the tender for the site.

The 88,267 sq ft plot, along Tai Thong Crescent, is zoned for residential use with commercial space on the first storey.

It is just across the road from a full private housing site along Upper Serangoon Road and Pheng Geck Avenue that was sold recently by URA to Santarli, which is involved in the construction business, for $628.22 psf ppr.

That tender, which closed in late June, attracted 13 bids.

The latest plot, at Tai Thong Crescent, is expected to generate a maximum gross floor area of about 308,945 sq ft and can potentially yield around 267 homes, according to URA's estimate.

R'ST Research director Ong Kah Seng says that the site's first-storey commercial component will position it ahead of the pure-residential sites in the vicinity sold at earlier state tenders.

"There are good schools like St Andrew's Junior and Secondary as well as Cedar Girls' Secondary School in the vicinity; hence the successful bidder has the option to offer mostly family-sized units," Mr Ong adds.

Lee Sze Teck, DWG's senior manager, research and consultancy, too points to the site's attractive location, about five minutes' walk from Potong Pasir MRT Station and adds that its commercial component will help address a shortfall in shopping amenities in the area.

"The injection of residential projects like 18 Woodsville, Nin Residence, The Sennett and the recently-sold Pheng Geck Avenue site will increase demand for amenities in the area," he notes.

Giving a slightly different take, SLP International executive director Nicholas Mak says the latest plot on offer is not as attractive as the three earlier residential sites sold in the vicinity due to its frontage along a "major road junction and a very busy fly-over".

Also, part of the development will have a two-storey height limit, which will restrict the development configuration, he adds.

For these reasons, Mr Mak suggests that the top bid for the Tai Thong Crescent land parcel could be in the $580-620 psf ppr range - below Santarli's price for the next-door site sold recently.

ERA Realty Network key executive officer Eugene Lim reckons the unsuccessful bidders at last month's tender for the next-door Pheng Geck Avenue plot may bid competitively for the latest land parcel on offer.

"Mixed developments are popular with home buyers and investors," he adds.

Analysts say the apartments in the Tai Thong Crescent project could sell at $1,250-1,450 psf.

DWG predicts the commercial space could fetch $4,000-4,500 psf.


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