Land parcel at Commonwealth Avenue receives 3 bids

A total of three bids were received by the Housing and Development Board (HDB) at the close of tender for a land parcel at Commonwealth Avenue.

The land parcel is nestled in the Queenstown HDB estate, just across the street from Queenstown MRT Station.

The site, which has a gross floor area of over 12,000 square metres or a maximum gross floor area of over 59,000 square metres, is planned for a private housing development.

The top bid came from a tie-up involving units of City Developments and Hong Leong Group: Intrepid Investments, Verwood Holdings and Hong Realty, for S$562.8 million.

This works out to S$883 per square foot per plot ratio.

The top bid beat earlier projections, and was 2.46 per cent higher than the second highest bid of S$549.2 million.

Analysts said the small number of bidders was not expected as this is an attractive site.

Eugene Lim, key executive officer at ERA Realty Network said: “This is a vast difference from the last two tenders after the cooling measures were announced which saw more than 10 bidders. Developers may be more cautious and realistic with their bidding in light of the cooling measures.”

Property consultant CBRE estimates a breakeven cost of S$1,350 per square foot and estimates the selling price of the development to be above S$1,600 per square foot.

Desmond Sim, associate director at CBRE Research said: “Prices fetched by the resale HDB flats in Queenstown are the most expensive in Singapore. A five-room HDB Strathmore unit is observed to be asking for up to S$100,000 cash-over-valuation, one of the highest transactions recorded.

Five-room and executive flats that are less than 10 years old fetched at around S$800,000 to S$1 million in some cases between the July-November 2012 period.”

While the latest cooling measures may have played a part in drawing a lower-than-usual number of bids, Mr Sim said the highest bid “is a reflection of the confidence that developers have in attracting future buyers for the 700-unit project” and that the bid price “sets an important benchmark for future bids of the sites close by.”

The 99-year lease site was launched for tender by the HDB on December 18 last year.

HDB said it will evaluate the provisional tender results and award the tender at a later date.

Source : Channel NewsAsia – 5 Feb 2013

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