$302m for Lakeside site

The tender for the land parcel at Boon Lay Way and Lakeside Drive has attracted the highest bid for a residential site this year.

Keppel Land Mayfair, a subsidiary of Mainboard-listed Keppel Land, has submitted the highest bid of $302.98 million for the 1.6-hectare site which can potentially yield 525 units.

This was a tad higher than the $302-million bid from Sim Lian Land for the tender of a 3.2ha land parcel at Tampines Avenue 1 and Tampines Avenue 10, which was closed almost two months ago.

The Urban Redevelopment Authority said that it has received 14 bids for the Boon Lay Way/Lakeside Drive tender, which was closed yesterday. This compared to only eight bids received for the Tampines Avenue 1/Avenue 10 plot.

With a gross floor area of 56,411 sq m and a 99-year lease, the next highest bid for the Boon Lay Way land parcel came from MCC Land at $263 million. The site was launched for tender on March 23 and the lowest bid received was $165.8 million from Cove Residential.

Mr Li Hiaw Ho, executive director of CBRE Research, said the site attracted so many bids due to its location – which is near two MRT stations, coupled with an unblocked view of Jurong Lake. He said the development will likely attract upgraders from nearby private and public housing estates as well as employees from the surrounding industrial centres and Nanyang Technological University.

Mr Li added that the top bid of $302.98 million which works out to $499 per square feet (psf) per plot ratio will translate to a breakeven price of between $830 psf and $850 psf. As a comparison, Mr Li pointed out that sub-sale units at The Caspian transacted at $650 psf and $800 psf in the past four months.

“Assuming the residential market continues its present state of activity and growth, the future project on this site could fetch an average price of $900 psf to $950 psf by early next year,” said Mr Li.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak noted that the number of bids placed for the land parcel was high. “This is a surprising high number indicating that developers in Singapore are still very hungry for development sites, especially those that are located near MRT stations,” he said.

Mr Mak said there is a high number of condominium developments around the site, which could contribute to the supply of resale units in the area. “The developers did not appear to be deterred by this fact. This indicates that they are very confident of the demand for new condominium units in the Boon Lay area,” said Mr Mak.

URA will decide on the winning bidder at a later date.

Source : Today – 5 May 2010

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