A DEVELOPER has agreed to pay at least $220.7 million for a residential site on Alexandra Road, in what is seen by some observers as a bullish move in light of recent property market caution.
This has triggered a tender for the 0.86ha plot, on which 360 to 400 homes can be built. It is a short walk from Redhill MRT station and the upcoming Metropolitan condominium.
The 99-year leasehold site has a maximum gross floor area of 451,428 sq ft and can hold a condominium of up to about 40 storeys high.
Under the reserve list system, a plot is put up for tender by the Government when a developer commits to bidding an acceptable minimum price.
In this case, the minimum bid price works out to about $448 per sq ft per plot ratio (psf ppr), considered a bullish bid by some analysts in view of the caution among developers, after the Government scrapped the deferred payment scheme recently.
Knight Frank's director of research and consultancy, Mr Nicholas Mak, said the trigger price was 'quite aggressive'.
He estimated that the eventual winning bid for the plot would end up in the range of $500 to $600 psf ppr. This will push selling prices of condo units there to between $1,000 psf and $1,050 psf.
The regional director and head of investments at Jones Lang LaSalle, Mr Lui Seng Fatt, expects an even higher winning bid of $650 to $800 psf ppr, which will work out to between $300 million and $380 million.
Meanwhile, the Urban Redevelopment Authority has awarded a 0.3ha residential plot in Enggor Street to Far East Organization's Bishan Properties at a price of $233.8 million, or $852 psf ppr.
The tender, which closed on Nov 1, attracted only two bids. Far East is reportedly expected to build about 200 apartments at the location.
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