High bid for site next to Tanah Merah MRT

A 99-year leasehold residential site along New Upper Changi Road has drawn a higher-than-expected top bid, pointing to a still-bullish sentiment among property developers here.

The land parcel sitting next to Tanah Merah MRT received 11 bids in all, the Urban Redevelopment Authority (URA) said. The highest offer came from Keppel Land unit Sherwood Development, which bid $434.6 million or $791.42 per square foot per plot ratio (psf ppr).

This bid was 17 per cent above that for a nearby plot in Tanah Merah Kechil sold to Fragrance Group and World Class Land in August.

KepLand said yesterday it plans to develop about 700 units measuring between 500 sq ft and 1,400 sq ft in one- to four-bedroom configurations when it secures the site.

Augustine Tan, president (Singapore residential) at KepLand, remarked: "Demand for well-located suburban homes here remains resilient, and we're confident that this new development will garner positive interest from genuine home-buyers and upgraders looking for quality properties in the established and popular Tanah Merah precinct."

Demand has been strong for projects in the vicinity: The eCO condominium, a short distance away in Bedok South Avenue 3, was the top-selling private residential site last month, with 402 units sold at a median price of $1,283 psf.

Despite the Government's recent move to cap home-loan tenures, ERA Realty Network's key executive officer Eugene Lim said: "This is a sign developers are still hungry for well-located mass-market plots."

Analysts are projecting a break-even cost of between $1,150 and $1,250 psf based on KepLand's bid, and expect an average selling price above $1,300 psf.

The second highest offer in the tender came from Bayfront Land, a tie-up between Fragrance Group and World Class Land. Its bid was $405.9 million, or $739.15 psf ppr. The lowest bid was from Vantage Properties, which offered $275 million, or $500.84 psf ppr.

Some of the offers were defensive, noted ERA's Mr Lim. The fourth highest bid, for example, came from a joint venture between Far East Organization, Frasers Centrepoint and Sekisui House, the same developers behind eCO.

Source: Business Times – 17 October 2012