Far East's $202.9m winning bid means suburban project may eventually launch at over $1,100 psf
(SINGAPORE) A plum condominium site in the heart of Ang Mo Kio has set a new record for suburban land prices, fetching some $601 per square foot per plot ratio (psf ppr).And when the project is eventually launched, it could set a record for private home prices outside the central areas, analysts said.
Yesterday, HDB said that Far East Organization put in the top bid for the 0.6-ha mass market condo site at Ang Mo Kio Avenue 8. The developer beat 13 other bidders with its bullish offer of $202.9 million - which works out to $601 psf ppr .
'The price is probably the highest paid for a suburban site in recent years,' said Donald Han, managing director of property firm Cushman & Wakefield.
Analysts said that Far East's bid for the 99-year leasehold site beat market predictions that the top bid would be around $500 psf ppr.
Far East's break-even cost for the site is now estimated to be in the region of $900-$1,000 psf, which means that units in the project could eventually be launched at $1,100-$1,200 psf - a record for private home prices in the suburbs.
'If Far East can achieve prices of around $1,200 psf for the project, then yes, it will be a record for the suburban areas,' said Ku Swee Yong, Savills Singapore's director of marketing and business development.
By comparison, units in other projects in the vicinity - albeit in less attractive locations - are mostly going for around $400-$600 psf.
Far East's bid was 11.8 per cent higher than the next highest bid of $538 psf ppr put in by Chip Eng Seng.
The bid was 68.9 per cent higher than the lowest bid of $356 psf ppr bid jointly put in by Wing Tai Holdings and United Engineers.
Far East also beat out other big names such as CapitaLand, Hong Leong Group and Frasers Centrepoint.
Experts said that the high prices and large number of bids signalled that developers had confidence in the strengthening suburban residential market - notwithstanding the US sub-prime mortgage fears that rattled stock markets here.
The plot also drew strong interest due to its good location. It is situated right next to Ang Mo Kio MRT station, and is just 15 minutes away from Orchard by train.
'With an increase of 4.2 per cent in overall HDB resale prices in the past six months, more HDB households would be poised to upgrade to this conveniently located private development,' said Li Hiaw Ho, executive director at CB Richard Ellis' research unit.
Units in the project could be sought-after by HDB upgraders in the Bishan and Toa Payoh estates - where HDB resale prices command a premium - as well as Ang Mo Kio itself, Mr Li said.
In addition, the project may also prove to be attractive to private homeowners in Serangoon and the Thomson/Upper Thomson Road areas, he added.
The site, which was on the government's reserve list, was launched in July after an unnamed developer bid $102 million, or $302 psf ppr area for it.
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