Wing Tai teams up with Greatearth Construction for $288m top offer
A RESIDENTIAL plot in Alexandra Road has attracted a bullish top bid of $288.4 million despite recent talk of a cooling market.
Developer Wing Tai Land teamed up with building company Greatearth Construction to submit the top bid for the plum site near Redhill MRT Station and just outside the Central Business District.
The bid works out to $639 per sq ft (psf) per plot ratio (ppr), which broadly refers to the amount of floor space.
The site - which is likely to feature a mid-market condominium - has a gross floor area of 451,428 sq ft, which consultants estimate will yield about 400 homes in blocks of up to 40 storeys high.
At the close of the tender yesterday, the 0.86ha, 99-year leasehold site had attracted five other bids from big players including Frasers Centrepoint, GuocoLand and Billion Rise - believed to be linked to Hong Kong giant Cheung Kong Holdings.
A joint bid was made by Sunny Vista Developments and TID. The second-highest bid of $271.6 million, or $602 psf ppr, came from a relative unknown - Lafe Development, a unit of listed manufacturer Lafe Technology. The tender will be awarded later.
In November 2005, an adjacent residential plot - where The Metropolitan is being built - fetched $350 psf ppr.
Property consultants said the strong response to this latest tender bodes well for the market. Knight Frank's head of consultancy and research, Mr Nicholas Mak, said: 'It gives a certain indication of how developers feel about the market in the coming 12 months or so. They expect current prices to continue to grow, especially in the mid-tier segment.'
Sluggish results for recent land sales had fuelled talk that developers were turning cautious because of the United States sub-prime crisis.
Two residential plots in Enggor Street in Tanjong Pagar recently drew no more than three bids and lower-than-expected prices, while another in Marina View attracted just two interested parties. In Tampines, a transitional office site drew only one offer.
Savills Singapore's director of marketing and business development, Mr Ku Swee Yong, said: 'It's a good closing to the year. It means the year didn't end on a whimper.'
Both Mr Ku and Mr Mak felt the Wing Tai-Greatearth team had been able to pip the rest of the field because they could rein in building costs with the latter aboard.
Surging construction costs had recently forced the Government to delay at least $2 billion worth of public sector projects to ease the pressure on building resources.
CB Richard Ellis' director of research, Mr Leonard Tay, expects the Alexandra project to benefit from 'potentially strong demand' from residents living in older private homes on the city fringes, especially those who have just sold their homes collectively.
'There might also be some potential for upgraders from the HDB estates in the vicinity, as HDB flats in the Bukit Merah and Queenstown areas typically sell for among the highest prices in the HDB resale market,' he added.
In the July to September period, five-room flats in Queenstown were going for a median price of $603,000.
Mr Tay and Mr Ku both estimated a breakeven price of about $1,000 psf for the future condo on the Alexandra plot, which would mean the future units could sell for $1,100 psf to $1,200 psf.
Mr Mak put his estimate of the breakeven cost at $1,020 to $1,100, which could mean a three-bedroom unit would go for $1.5 million.
BRIGHT ENDING
'It's a good closing to the year. It means that the year didn't end with a whimper.'
MR KU SWEE YONG of Savills, on the joint venture's top bid for the plot
# The new development could have around 400 units.
# The expected selling price of apartments is about $1,100 to $1,200 psf.
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