Land parcel at Westwood Avenue attracts 12 bids

A land parcel at Westwood Avenue for executive condominium (EC) development has attracted 12 bids at the close of tender on Tuesday.

The Housing and Development Board (HDB) said the top bid of S$198.9 million came jointly from Changi Properties and Heeton Homes.

This translates to a land price of S$382 per square foot per plot ratio.

The next highest bid of S$198 million is a joint tender from Verwood Holdings and TID Residential.

Meanwhile, the lowest bid was submitted by Sim Lian Land for S$93.8 million.

CBRE Research head Desmond Sim said in a note that the 12 bids “demonstrate developers’ hunger to replenish their land banks in light of the pull-back in Government Land Sale sites”.

He added that “the relatively palatable quantum for the site was another contributing factor for the high number of bids”.

Meanwhile, Christine Li, head of research & consultancy at Orange Tee, said “the bullish bids by developers for the Westwood Avenue site could be due to pent-up demand in the area”.

The Westwood Avenue EC site is the first to be sold since measures were announced to tighten mortgage servicing terms for EC buyers.

This would increase the cost of EC units for HDB upgraders and tighten financing for the overall EC market.

The measures, which are in effect after 10 December 2013, include a cap of the Mortgage Servicing Ratio for housing loans granted by financial institutions for EC units bought directly from property developers at 30 per cent of a borrower’s gross monthly income, and the imposition of a resale levy for second-time applicants.

Experts said Westwood Avenue EC’s breakeven price should be around S$750 per square foot (psf), and they expect the selling price to be around S$820 psf.

Some 485 units are expected to be built on the 99-year leasehold site which measures 17,284.8 square metres.

HDB said the award of the tender will be announced at a later date after all the bids have been evaluated.

Source : Channel NewsAsia – 7 Jan 2014

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