Residential Market News Extract - 24 July 2012

Two sites at Dairy Farm, Punggol up for tender

Two residential sites, expected to yield about 950 units, have been launched by the Urban Redevelopment Authority (URA), and the Housing and Development Board (HDB).

The 99-year leasehold sites, at Dairy Farm Road and Punggol Way/Punggol Walk respectively, are catered to the development of condominiums/flats, and executive condominiums (EC) respectively.

The 188,861.2 square feet (sq ft) site at Dairy Farm Road, has a maximum gross floor area (GFA) of 396,617.4 sq ft, and is expected to yield some 390 homes.

The Dairy Farm Road site is attractive because it is nested within the Dairy Farm neighbourhood and near to the nature reserve. There are amenities nearby such as The Rail Mall and schools. The upcoming downtown line, Hillview MRT station in 2015 will further add to the attractiveness of the site.

Eugene Lim, key executive officer at ERA Realty Network, said he expects strong bidding of about eight to 10 bidders for the plot, noting that the subject site is superior to the land parcel at Petir Road that was sold in November last year.

"The bidding price is expected to be in the range of $560-$600 psf ppr," he added.

Another analyst opined that interest might be moderate (between four to six bidders), with an expected winning bid of between $550-$590 psf ppr.

Interest for this site to be moderate with up to six bidders, given the existing unsold inventory of about 1,070 units from the nearby developments, in the Hillview and Chestnut Avenue areas.

The second site, which is located next to Twin Waterfalls at Punggol Way/Punggol Walk, has a site area of 201,799.4 sq ft, and maximum GFA of 605,398.3 sq ft. It is expected to yield about 560 EC units.

The site is expected to see up to six bidders, with the estimated top bid between $300 and $350 psf ppr, which is comparable to the successful land price of $320 psf ppr for a site at Punggol Central/Edgefield Plains which was sold to Qingjian in April.

The breakeven cost could be between $600-$650 psf, and the estimated selling price between $750-$800 psf, comparable to Twin Waterfalls.

EC launches in the area have seen strong sales, with Prive, Riverparc Residences having sold all of their units, and Twin Waterfalls being 98 per cent sold. That being said, with so many project launches in Punggol, demand might have reached a saturation point, and developers might be cautious with their bids.

Source: Business Times – 24 July 2012