URA receives 23 bids for Jalan Jurong Kechil site

The Urban Redevelopment Authority (URA) received 23 bids at the close of tender for the residential site at Jalan Jurong Kechil on Thursday.

Property consultants said this is the highest number of bids received since the 32 bids submitted in the tender for the Westwood Avenue residential site that closed in December 2009.

World Class Developments (North) Pte Ltd – a subsidiary of SGX-listed firm Aspial Corporation – was the highest bidder for the land parcel for S$73.8 million, or S$481.51 per square foot per plot ratio (psf ppr), for a lease of 60 years.

This was 10 per cent above the second highest bid of S$66.9 million made by CEL Property, a wholly owned subsidiary of Chip Eng Seng Corporation.

Meanwhile, Roxy Homes, Roxy-Pacific Holdings’ wholly owned subsidiary, made the third highest bid of S$59.5 million.

The lowest bid came from Kwan House, with a bid price of S$23.3 million or $152 psf ppr for a 45 year lease. It was also the only player which submitted a bid for a 45 years lease.

Altogether, the variable leasehold site attracted 22 bids for a lease option of 60 year lease, with just one bid submitted for the option of 45 years.

Offered for sale with a lease option of 30 years, 45 years or 60 years, this is URA’s first residential site offered for sale on such variable lease terms.

Eugene Lim, key executive officer at ERA Realty Network, said that the response revealed that developers believe there is potential with a 60-year lease site, though the wide range of bid prices show that developers value the land differently.

As this is a new product, Nicholas Mak, executive director at SLP International Property Consultants said some bids could also be ‘mispriced in a closed envelope tender’.

Based on the top bid of S$481.51 psf ppr, Nicholas Mak, executive director at SLP International Property Consultants said the breakeven cost is estimated to be about S$840 psf to S$870 psf.

However, Mr Mak said the developer of this site could face a risk that some banks may not prepared to finance homebuyers for residential projects with leases of 60 years or less.

Mr Lim believed that the selling price will most probably start from S$1,100 psf, given that nearby development Suites at Bukit Timah has an average selling price of S$1,600 psf for a one bedroom unit.

The Jalan Jurong Kechil site has an estimated gross floor area of 14,239 square metres and was launched for public tender on 19 September.

URA said it would decide on the winning bidder at a later date.

Source : Channel NewsAsia – 15 Nov 2012

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