Sentosa Cove Condo Plot Draws 3 Bids

Source : The Business Times, December 13, 2007

Tender for Boon Lay condo site attracts just 2 bids that are below expectations

A TENDER for the last condo plot at Sentosa Cove - named The Pinnacle Collection - is said to have attracted three bids when it closed yesterday, including a joint bid by Ho Bee Investment and Malaysia's IOI Group. The other two bidders are said to include foreign players/funds.

Sentosa Cove Pte Ltd (SCPL) declined to reveal the names of the bidders or their bid prices ahead of an evaluation process that will be based on both design concept and price. 'We expect the site to be awarded by early January,' an SCPL spokeswoman said.

The plum 99-year leasehold condo site, gracing the entrance to Sentosa Cove's marina basin, has a reserve price of $963.8 million or $1,600 psf per plot ratio, although top bids were expected to be above $2,000 psf, which would suggest an absolute amount of at least $1.2 billion. However, the deal clincher for the winning bidder may be its design concept, rather than how much it bid, market watchers observed.

The 99-year leasehold site can be developed into a 20-storey condo (this will make it the tallest project in the upscale waterfront housing precinct) with up to 357 apartments.

Over in the Jurong/Boon Lay area, an Urban Redevelopment Authority tender for a condo site next to Lakeside MRT Station drew just two bids - $205.56 million or $248 psf per plot ratio from Frasers Centrepoint and $191 million or $230.44 psf ppr from GuocoLand.

Both bids are below earlier market expectations of about $300 to $375 psf ppr indicated in October. Nonetheless, market watchers expect the site to be awarded. CB Richard Ellis observed that the higher bid yesterday of $248 psf ppr is 26 per cent above the $197 psf ppr achieved for The Lakeshore condo plot back in August 2002.

A spokeswoman for Frasers Centrepoint described the group's bid price as 'conservative', adding that it would reflect a breakeven cost of about $550 psf. 'We would be looking at an average selling price of at least $700 psf,' she added.

The group's scheme is for an 18-storey development comprising three blocks, with a total of 600-plus apartments based on an average size of 1,300 sq ft. 'We're bullish about the mid-market and upgrader segment in 2008,' she added.

CBRE said that units at The Lakeshore near the latest site are being marketed at around $800 psf by its developer. In the subsale market, Lakeshore units have changed hands in recent months at $650-750 psf, while units at The Centris, one MRT station away, have been changing hands lately at $600-650 psf.