Residential Market News Extract - 13 June 2012

CDL makes top bid for Buangkok condo plot

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.

CDL's break-even cost for a new project on the Buangkok site is estimated 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.

Source: Business Times – 13 June 2012