Woodleigh Site Draws Six Fairly Low Bids

Source : The Strait Times, June 25, 2008

THE tender for a Woodleigh Close residential site attracted plenty of interest, but the bids were all on the low side.

Six hopefuls lined up for the 1.08ha, 99-year leasehold site with Frasers Centrepoint lodging the top bid of $87.68 million, or $270 per sq ft (psf) of gross floor area.

This falls well below expectations of at least $350 psf and reflects the market's subdued state.

Hoi Hup Realty was the second highest bidder with an offer of $82.82 million or $255 psf.

A joint venture between Hong Leong Holdings unit Kingston Development and TID offered $81.18 million or $250 psf.

The other bids for the site near the Potong Pasir MRT station ranged from $74 million to $81 million.

CBRE Research executive director Li Hiaw Ho said: 'While the six bids submitted for the site reflects fairly good interest, the lower quantum of prices is a reflection of a more tentative mood in the residential market and rising construction costs.'

Mr Ku Swee Yong, Savills Singapore's director of marketing and business development, said: 'The bids are lower than expected because of higher construction costs, as well as the shorter and more expensive credit lines extended to developers.'

Frasers Centrepoint aims to build about 300 high-rise condominium units on the site.

Based on the top bid, the estimated breakeven cost of the new project will be around $650 psf to $700 psf, said Mr Li.

He added that the new apartments could go for $800 psf to $850 psf, considering that nearby units in freehold Blossoms@Woodleigh have been sold in the resale market at an average price of $840 psf this year.

Also, units in Casa Meya, a new freehold project in Potong Pasir estate featuring mostly small units of around 800 sq ft, went for around $910 psf, said Mr Li.

But a market watcher said Frasers Centrepoint may be hoping to sell the new apartments for up to $900 psf.