MCL Land (Brighton) has swooped in on two adjoining executive condominium (EC) plots in Choa Chu Kang, offering $375.05 per square foot per plot ratio (psf ppr) for one and $338.94 psf ppr for the other. This works out to a tender price of $232.5 million for Plot A and $210.1 million for Plot B. This move is reminiscent of Kingsford Developments end-2013 purchase of two adjacent private housing sites in Upper Serangoon View, in which it paid a substantial premium of 16 per cent and 13 per cent over the respective second-highest bids. In this round however, the premium was less stark. For Parcel A, the premium MCL Land paid over the second-highest bid from JBE Holdings ($373.26 psf ppr) was 0.48 per cent; for Parcel B, the premium over the second-highest bid jointly put up by Verwood Holdings and TID Residential ($333.14 psf ppr) was 1.74 per cent. Desmond Sim, head of CBRE Research Singapore, commented that it was difficult to assess whether the batched tender moderated the bids because of the price ceiling inherent in the EC market, which limits the pool of buyers. At the same time, demand for ECs has slowed down in recent months and URA figures show that there were still unsold EC units as at end January. Notably, all four developers who put up bids for Parcel B also participated in Parcel As tender. These were MCL Land (Brighton), the joint bid by Verwood Holdings and TID Residential, EL Development and Sim Lian Land. Parcel A received seven bids, and Parcel B, four. Both sites measure 177,120 sq ft each, with maximum gross floor area (GFA) of 619,920 sq ft. They are expected to yield about 575 units each. The difference in the values of the bids and number of contestants for the two sites can be explained by the greater attractiveness of Parcel A over Parcel B. One side of Parcel B faces a petrol kiosk, and another, a HDB multi-storey car park. Ong Teck Hui, the national director for research and consultancy at Jones Lang LaSalle, suggested, however, that, because both parcels have been won by the same developer, they could be amalgamated into one integrated development, mitigating Parcel Bs disadvantages through design and thus achieving an overall better average price than if the sites were developed individually. If the sites are not amalgamated, the selling price of units on Parcel B could potentially be lower by $40 to $50 psf, said Mr Ong. ERAs key executive officer Eugene Lim said that while competition was not as fierce as in the last EC site in Anchorvale, which drew 12 bidders, yesterdays bidding results still point to developers being confident that there is a demand for ECs. Notably, the two EC sites are the first to be launched since the measures unveiled on Dec 9 to include a cap on the mortgage-servicing ratio at 30 per cent of gross monthly income, and the introduction of a resale levy for second-timer applicants who buy EC units directly from developers. Source: The Business Time Article Published on 26 Feb 2014 08:10 AM
Posted on: Wed, 05 Mar 2014 05:23:37 +0000
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