Friday, August 3, 2012

Fragrance tie-up top bidder for Tanah Merah site


Business Times: Wed, Aug 01

A TIE-UP between Fragrance Group and World Class Land yesterday pipped CapitaLand unit Areca Investment by 1.8 per cent or about $5.1 million to emerge as the highest bidder for a plum 99-year leasehold private condo site diagonally opposite Tanah Merah MRT Station.

CapitaLand group is developing Bedok Residences, one MRT stop closer to town, which sold like hot cakes last year.

Yesterday's tender in Tanah Merah drew a massive 13 bids - compared with the seven that a nearby plot at Bedok South Avenue 3, further away from Tanah Merah Station, drew at a state tender which closed in February.

A consortium comprising Far East Organization, Frasers Centrepoint and Sekisui House paid $534 psf ppr for that site, which will be developed into a new condo, Eco, expected to go on the market soon.

The supply pipeline in the area is set to increase. In the immediate vicinity of Tanah Merah Station, the state is slated to launch this month another private housing site through the confirmed list. In December, a nearby plot will be made available for application through the reserve list.

Yesterday's top bidder, The Fragrance-World Class Land partnership, will have a time advantage over these two plots and can be expected to release its project as soon as possible, market watchers say.

BT understands that the duo's top bid yesterday translates to a break-even cost of about $1,000 psf and that they could be looking at a launch price of about $1,300-1,400 psf on average. Their proposed project on the site is likely to be about 12-15 storeys high and, according to the Urban Redevelopment Authority's estimate, can generate about 415 units.

Analysts reckon the project could have a range of unit types (for example, one to four-bedders and penthouses) with condo facilities, hence appealing to families, rather than being crammed with mostly small units.

Fragrance Group is controlled by James Koh Wee Meng. His brother, Koh Wee Seng, controls Aspial Corporation, the parent of World Class Land. Fragrance and Aspial are listed on the Singapore Exchange.

Credo Real Estate executive director Ong Teck Hui attributes yesterday's strong tender response primarily to the site's proximity to Tanah Merah Station and the expectation of very keen demand from buyers in the location.

Such buyers demonstrated strong interest when they zoomed in on Bedok Residences at its launch in late 2011, resulting in rapid take-up. Bedok Residences has the added draw of commercial amenities as it will be part of a mixed development.

But as Mr Ong points out, the Tanah Merah plot tendered yesterday is also adjacent to a land parcel that is zoned for commercial use and likely to have retail facilities should it be sold and developed in the future.

"This would enhance the convenience of the subject site as well as others in the vicinity."

"Based on caveats lodged, the average price of Bedok Residences was $1,350 psf, so we may expect the selling price of the new project on the site just tendered to be a shade below that," said Mr Ong.

Other bidders at yesterday's tender include UVD - a Singapore Land-UOL Group joint venture - which bid $621.71 psf ppr; a tie-up involving City Developments' unit Verwood Holdings, Hong Leong Group's Intrepid Investments, and TID Residential which bid $620 psf ppr; and Keppel Land's Sherwood Development ($610.47 psf ppr).

Sing Holdings teamed up with UE E&C's unit Maxdin for a $573.36 psf ppr bid. Qingjian Realty offered $570.51 psf ppr. Meadows Bright Development and Hock Lian Seng Holdings joined forces to bid $569.33 psf ppr.

Far East Orchard Limited (formerly Orchard Parade Holdings) partnered Frasers Centrepoint and Sekisui for a $557 psf ppr bid.

Also participating at yesterday's tender were Hoi Hup; Han Chee Juan's Teneriffe Development; and Overseas Union Enterprise (through OUE Reef Development).

The lowest bid of $478.78 psf ppr was from Trident Assets, whose shareholders are Victor Soh's Pinnacle Assets, architect Chee Hsian Sing and Melvin Poh.

  
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