Developers shun some prime en bloc sites

Despite the en bloc fever, some prime sites have been bypassed as the recent property market cooling measures make developers picky about their land acquisitions.

These sites include the S$700 million Hawaii Tower at Meyer Road as well as the S$92 million Grand Tower, located near Novena MRT Station. The estimated S$70 million Holland Tower, which is a short drive from Orchard Road, has yet to find a buyer, too.

Bartley Grove and Euro-Asia Apartments, which have asking prices of S$142 million and S$70 million respectively, could not find buyers at the close of their tenders.

Mr Jeremy Lake, executive director of investment properties at CB Richard Ellis, said: “Owners have to be mindful that, in view of the government measures, particularly in January, it is unlikely that prices are going to run away.”

Most of these en bloc properties are in prime locations within the central areas, or just outside, and within luxury enclaves. Prime properties have seen slower demand compared with mass market suburban projects.

Mr Lake said: “The luxury market arguably is 5 or 10 per cent below the previous peak in 2007 and 2008 … Some of the buyers are adopting a wait-and-see approach.”

Developers are also looking forward to government land supply, which will see 30 plots for residential use released in the first half of this year. Still, analysts note that government land prices for mass market projects are increasing, with the most recent tender for a Bendemeer site dealt at a whopping S$543 million.

Mr Karamjit Singh, managing director of Credo Real Estate, said: “Mass market land values have risen by a much greater extent than prime.”

He said that some developers are still divided.

“Some seem to be very content playing in the mass market segment because they are enjoying the best volumes … But there are some developers out there who are beginning to realise that they need to look ahead of the curve and look at what’s the next wave.”

Source : Today – 13 Apr 2011

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