Enggor St Tender Attracts Only Two Bids

Source : The Straits Times, Nov 2, 2007

It is the first public tender to close since the deferred payment scheme was scrapped

A WEAK response to the tender for a residential site in Enggor Street suggests market sentiment might have turned cautious, analysts say.

The 99-year leasehold site at Tanjong Pagar had attracted only two bids by the time it closed yesterday, said the Urban Redevelopment Authority.

The top bid for the site was put in by Far East Organization's Bishan Properties at $233.8 million, or $852 per sq ft per plot ratio (psf ppr).

The only other bid was almost half that - $151 million, or $550 psf ppr - and was tendered by First Capital Holdings.

This is the first public tender to close since the Government announced last week that it was scrapping the deferred payment scheme with immediate effect.

The scheme allowed buyers to fork out a down payment of only 10 or 20 per cent when purchasing a new home; the rest came due upon completion, which could sometimes be as long as three years later.

Analysts that The Straits Times spoke to said the Enggor Street bids reflected a more cautious attitude among developers.

Singapore's spectacular property bull-run has, in recent times, seen up to 10 or more bids for public tenders.

'The mood has turned cautious and the bids reflect this,' said Chesterton International's head of research and consultancy, Mr Colin Tan.

CB Richard Ellis (CBRE) Research executive director Li Hiaw Ho said this change could be due to the DPS announcement.

Mr Nicholas Mak, the director of research and consultancy at Knight Frank, agreed.

He pointed to uncertainty in the market, and added that developers are monitoring the behaviour of homebuyers before committing to buying more government land.

However, another reason for the weak response could be the location.

The site, with a gross floor area of 274,522 sq ft, is behind Far East's Icon condo, and is sandwiched between a commercial site and another residential site whose tender closes on Nov 15.

But as it is only a five-minute walk from the Tanjong Pagar MRT station - at the heart of the Central Business District - the site remains attractive, say analysts.

Estimates for the project, launched for sale on Sept 4, indicate that it could provide 330 to 360 small units and a handful of large four-bedroom units, said Mr Mak.

CBRE's Mr Li said the top bid was 'reasonable' and should translate into a break-even price of $1,300 psf for the future project.

Its units are likely to be priced at $1,500 to $2,100 psf when launched for sale - similar to the prices fetched at Icon recently.