Yishun Condo Site Draws Record Bid Of $213.5m

Source : The Straits Times, Mar 26, 2008

MCL Land's offer for 99-year plot almost 70 per cent higher than the next bid

A YISHUN condominium site drew a higher-than-expected top bid when its tender closed yesterday, belying expectations of a property market slide.

Developer MCL Land offered $213.5 million for the 99-year leasehold plot, which works out to about $350 per sq ft per plot ratio (psf ppr) - believed to be a new benchmark for Yishun.

Property consultants said this could translate into the finished project selling at record prices for the area, even as home buyers are now holding out for lower prices in a subdued market.

Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the end units for the Yishun project could be priced from $830 psf up to almost $900 psf.

This would be almost double what the 99-year leasehold Orchid Park Condo down the road is fetching. Four units at the 14-year-old development have been sold there this year at an average price of $460 psf.

MCL Land's bid pipped four others and came in almost 70 per cent higher than the next bid, from Peak Green, at $127 million, or $208 psf ppr.

Frasers Centrepoint, Sim Lian and Hong Kong's Cheung Kong also tabled offers ranging from $57.7 million to $109.7 million, or $95 to $180 psf ppr - which some consultants said were 'unrealistically low' bids. They had predicted bids of between $200 and $300 psf ppr.

But Mr Li Hiaw Ho, executive director of CBRE Research, said the response was 'fairly robust' and signalled 'developers' confidence in the suburban segment despite the current lukewarm response to new projects'.

'Should the United States enter a mild recession and the sub-prime problems clear up, sentiment for suburban homes should improve after June, bringing demand and upward price momentum back to the market.'

Experts described MCL Land's offer as 'extremely bullish' and suggested that the developer may be short on land bank in the mass market segment.

MCL Land said in its latest financial results that it bought some sites last year, including Holland Hill Mansions and Dynasty Court Garden 1 in Sixth Avenue. Its land bank can now yield 780 units with a total gross floor area of 1.4 million sq ft.

The Yishun site is at the corner of Yishun Avenues 1 and 2, and is 10 minutes' walk from Khatib MRT Station. It is next to Yishun Stadium and overlooks Lower Seletar Reservoir.

'The site is good in that frontage to the reservoir is fantastic,' said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore. 'I agree you should pay a premium for this site, but this seems to be a very significant premium.'

Separately, HDB yesterday put two more sites up for sale through its reserve list system.

One is a 182,986 sq ft plot at Jurong West Street 42 for executive condos, while the other is a 244,341 sq ft condo site at Chestnut Avenue in Bukit Panjang.

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HIGH BID = HIGH HOME PRICES?

Property consultants said the higher-than-expected offer by MCL Land could translate into the finished project selling at record prices for Yishun, even as home buyers are now holding out for lower prices in a subdued market.