UOL-Kheng Leong Is Top Simei Site Bidder

Source : The Business Times, January 5, 2008

UOL says it plans to develop about 600 units with full condo facilities at the site on Simei Street4

A PARTNERSHIP between UOL Group and Kheng Leong - both companies linked to banker Wee Cho Yaw - emerged as the top bidder for a residential site at Simei Street 4 at the close of the tender yesterday.

The two companies' bid, which was the highest of three bids, came to $236.1 million, or some $296 per square foot per plot ratio (psf ppr).

The second-highest bid was put in by Frasers Centrepoint, which offered $231.3 million or $290 psf ppr. The lowest bid was put in by NTUC Choice Homes, which offered $187.8 million, or $236 psf ppr.

'When awarded the site, UOL plans to develop about 600 units with full condo facilities,' a spokeswoman for the company told BT.

The project will be launched either at the end of this year or early in 2009, UOL said.

There is pent-up demand for private homes in the East Coast area, market watchers said.

'There has not been a new launch for a mass-market residential project in the Simei, Tampines and Pasir Ris areas in 2007, and there could be pent-up demand from private homeowners and HDB upgraders residing in these estates,' said Li Hiaw Ho, executive director for research at CB Richard Ellis.

The site is attractive because it is within walking distance to Simei MRT Station and has easy access to expressways, he said.

The area could soon see some new launches. UOL, for one, plans to launch a condo on the East Coast Ville en bloc site this quarter.

The developer bought the site in December 2006 for about $400 psf ppr.

And in a tender that closed on Dec 18 last year, Chip Eng Seng won a condo site in Pasir Ris with its offer of $104 million, or $228 psf ppr. The site, on Elias Road, also saw three bids.

By contrast, a government tender for a residential site at Woodlands Avenue 2/Rosewood Drive, which closed in November, attracted eight bids.

Nicholas Mak, director of research and consultancy at Knight Frank, said that the number of bids for the Simei site was 'within the usual expected number of bids for government land sale tenders'.

He said: 'One reason for the lower number of bids is that many developers have replenished their land bank and they are more selective of further land acquisitions.'

The break-even price for the Simei site is estimated be about $620-$650 psf, with units likely to sell at $700-$750 psf, experts said.

UOL's shares closed six cents up at $4.49 yesterday.