Despite last month's rule changes affecting the executive condo market, an EC site in Westwood Avenue has drawn strong interest with 12 bids and a high top bid of $198.9 million from a Koh Brothers-Heeton Homes partnership.
The price works out to $382 psf ppr for the 186,052 sq ft land parcel, just above the high end of market expectations of between $285 psf ppr and $380 psf ppr.
The top offer narrowly edged out the second-highest bid of $380 psf ppr jointly lodged by City Developments unit Verwood Holdings and TID Residential.
Most market watchers declared the outcome as a reflection of developers' confidence that demand for ECs would remain strong. However, some pointed to a wider gap between the top and lowest bids at the tender compared with the previous EC land tender at Yuan Ching Road last July. This could mean a bigger divergence in developers' take on this public-private housing hybrid. While the top few bids were more optimistic, the bottom half of the bids were generally cautious and below expectations. Out of 12 bids, 5 were below $300 psf ppr and the gap between the top and bottom bid is 111%.
At the tender, Fantasia Investment (Singapore), believed to be a unit of Hong Kong-listed Fantasia Holdings Group, bid $347.06 psf ppr. A partnership involving Singhaiyi unit Phoenix 88, Maxdin Pte Ltd and LMG Realty (part of Lee Metal Group) offered $335.71 psf ppr. SL (Serangoon), controlled by Douglas Ong Pang Chye, bid $333.62 psf ppr. UOL offered $316.73 psf ppr and MCL Land, $312.89 psf ppr. Amara Holdings unit TTH Development joined forces with EL Development for a $270.85 psf ppr bid.
Evia Real Estate, Ho Lee Group and CNH Investment teamed up for a $261.81 psf ppr bid. Also participating at the tender were Wee Hur Development ($254.59 psf ppr) and a joint-venture involving Hoi Hup Realty, Sunway Developments and Oriental Worldwide Investments ($243.79 psf ppr). Sim Lian Land placed the lowest bid - $180.06 psf ppr.
Analysts estimate that the top bid reflects a breakeven cost of about $750 psf, and assuming a 10 per cent profit margin, the target selling price could be around $820-830 psf. Francis Koh, managing director and group CEO of Koh Brothers Group, said: "We plan to build a project with about 480 units. When launched next year, the project will be priced to sell". Mr Koh also added that in line with a healthy living theme, they plan to promote a cycling community by having bicycle parking facilities and a cycling track within the development.
The future project on the Westwood Avenue plot will be the first in recent times where second-timer applicants (that is, HDB upgraders) will have to pay the Housing Board a resale levy of up to $50,000 following the recent changes in EC rulings.
For more District Guides, you can head over to iProperty.com Singapore.