Published
February 25, 2011
Record bid for Bishan site polarises views
CapitaLand's $869 psf ppr bid is 27% above KepLand's
By KALPANA RASHIWALA
(SINGAPORE) CapitaLand yesterday set a new record for
99-year-leasehold suburban condominium land, bidding $869.36 per
square foot of potential gross floor area for a plum condo site
near Bishan MRT Station and the group's Junction 8 mall.
The property giant's bid was a whopping 27 per cent or about $118
million above the next highest offer, from fellow Temasek
stablemate Keppel Land, which bid $683 per square foot per plot
ratio (psf ppr).
The site - one of the most attractive on the Government Land Sales
(GLS) Programme - drew 19 bids in one of the best showings for a
state tender for private housing land.
However, a wide spread in the bids also reflects a divergence of
views on the market outlook. CapitaLand's top bid was about 2.6
times the lowest offer of about $337 psf ppr from a unit of Hiap
Hoe group.
'The two Temasek-linked companies seem to be more optimistic than
other key developers, who are familiar with this market segment,'
said Knight Frank chairman Tan Tiong Cheng.
A developer lamented: 'On the one hand, government is trying to
tame the property market and here we have two TLCs putting in the
most aggressive bids at a state tender. So it leaves us wondering
where property prices will go next.'
Most analysts estimate CapitaLand's breakeven cost at about $1,300
psf.
'The top bid for the Bishan site suggests that the developer is
looking to sell the units at around $1,400 psf,' said CBRE Research
executive director Li Hiaw Ho.
Units in Centro Residences at Ang Mo Kio Central have sold at
$1,200-1,400 psf, according to caveats lodged between October last
year and January this year. 'We expect the new project to be able
to attract upgraders in Bishan, Toa Payoh and the nearby landed
estates as well as farther afield when it is launched.'
Due to the site's high 4.9 plot ratio (ratio of maximum gross floor
area to land area), the future development can likely reach 40
storeys and residents on the upper floors can enjoy a good view as
far as MacRitchie and Lower Peirce reservoirs, Mr Ho added.
Knight Frank's Mr Tan said the 27 per cent spread between the top
two bids at yesterday's tender was the highest for a 99-year
high-rise condo plot since property cooling measures were
introduced by the government over the past year. 'But this is also
one of the best sites on the GLS Programme.'
Analysts said CapitaLand's bid amount also reflects the property
giant's hunger for investments. The group's president and CEO Liew
Mun Leong said earlier this week it is looking at $5-6 billion new
investments in 2011. Ironically, Mr Liew then also pointed to the
risk of overpaying for sites through 'blind tenders' for state land
sales unlike private treaty negotiations for collective
sales.
Yesterday, a CapitaLand spokesman said: 'We are confident that the
project will be well-received by homebuyers. The site is in one of
the most desired residential estates in the central region of
Singapore, in the heart of the popular Bishan residential
area.'
The proposed development will have about 600 units and be at least
36 storeys high, she added.
Most property consultants had expected top bids to come in at
around $600 psf ppr. City Developments yesterday bid at about $661
psf ppr. A consortium that includes Far East Organization, which
has developed condo projects in Bishan, bid about $508 psf ppr. Sim
Lian, which also has experience in the location, offered around
$423 psf ppr.
Yesterday's tender also saw new participants from overseas - Hong
Kong's Shun Tak Holdings teamed up with MCL Land to bid $575 psf
ppr. Bandar Raya Developments from Malaysia partnered local
developer Novelty group for a $600.54 psf ppr bid. China developers
MCC Land and Qingdao Construction placed separate bids of $676 psf
ppr and $633 psf ppr respectively.
The bullish top bids yesterday led SLP International executive
director Nicholas Mak to suggest: 'This may push the authorities
closer to formulating more cooling measures. But they'll probably
look at the next few land tenders first.'
An analyst said: 'These are the signs that will draw potential
buyers who have been waiting on the sidelines back to the market -
when they see launches doing reasonably well and bullish land bids
which means prices are likely to go even higher.'
Said Urban Redevelopment Authority's group director (land sales and
administration) Marc Boey: 'The wide spread of bids at the tender
reflects the divergence of views among developers on the impact of
the latest round of cooling measures on the property market going
forward.
'Bids which are towards the lower end of the range may reflect the
dampening effect of the measures and greater
caution.'
extracted from
cna forum