Alexandra Road Site Draws Six Bids

Source : The Business Times, December 28, 2007

Top bid of $288.4m made jointly by Wing Tai Holdings, United Engineers

A RESIDENTIAL site at Alexandra Road saw a bullish six bids and a top bid of $288.4 million - or $639 per square foot per plot ratio (psf ppr) - at the tender's close yesterday.

The top bid for the 92,100 sq ft site was jointly put in by Wing Tai Holdings and United Engineers (UE).

Other bidders include familiar names such as Singapore's Hong Leong Group, GuocoLand and Frasers Centrepoint, as well as mainboard-listed Lafe Technology, which designs and manufactures computer magnetic heads.

'This price is bullish and shows that developers have not lost their appetite for good quality plots of land,' said Ku Swee Yong, director of marketing and business development at Savills Singapore.

The site is conveniently located along Alexandra Road and less than five minutes' walk away from Redhill MRT station.

Nicholas Mak, director of research and consultancy at Knight Frank said: 'The relatively high level of developers' interest and the strong bids reflect that developers are still bullish on the Singapore property market in 2008.'

Leonard Tay, director of research at CB Richard Ellis (CBRE), pointed out that the top bid is 31 per cent above the reserve price of $489 psf ppr and 83 per cent above the price of $350 psf ppr paid for the adjacent The Metropolitan site in November 2005.

'This price of $639 psf ppr will translate into an estimated breakeven price of about $1,000 psf for the future condominium project to be built on this site, and it is likely that units will sell between $1,100 and $1,200 psf,' Mr Tay said.

Sub-sales of units at The Metropolitan are currently at around $900-1,100 psf, CBRE said.

The 99-year leasehold site has a maximum gross floor area of 451,400 sq ft. The site could yield about 360 to 400 condominium units, said Knight Frank's Mr Mak.

Market watchers said that the upcoming development could see strong demand from occupiers of older private residential projects - especially home owners who had benefited from collective sales.

There might also be some potential for upgraders from the HDB estates in the vicinity, as HDB flats in the Bukit Merah and Queenstown area typically sell for among the highest prices in the HDB resale market, CBRE's Mr Tay said.

According to HDB's data for the third quarter of 2007, five-room flats in Bukit Merah have a median resale price of $530,000, while five-room and executive flats in Queenstown have median resale prices of $603,000 and $719,000 respectively.

Wing Tai and UE's bid is 6 per cent higher than the second highest bid of $602 psf ppr put in by Lafe Technology.

The partners' bid is also 28 per cent higher than the lowest bid of $501 psf ppr put in by GuocoLand.