Source : The Business Times
13 June 2007
Joint venture offers $524 psf ppr, a level not seen for such plot since '97
REFLECTING developers' confidence in the mid-tier residential sector, a joint venture between Ho Bee and NTUC Choice Homes yesterday cast the top bid of $524 psf per plot ratio for a 99-year leasehold condo plot at Dakota Crescent in the Mountbatten Road/Old Airport Road area fronting Geylang River.
The state tender attracted 15 bids, most of them at above $400 per square foot per plot ratio.
Market watchers recalled that the last time 99-year condo sites outside the prime districts and Sentosa Cove fetched such high price levels was in 1997. In that year, the plots that were subsequently developed into the Rafflesia condo in Bishan and Costa del Sol in the Bayshore area were sold at $403 psf per plot ratio and $457 psf ppr respectively, according to CB Richard Ellis data.
Ho Bee Investment executive director Ong Chong Hua estimates the break-even cost for a new condo on the Dakota Crescent site will be about $850 psf and that it could sell for about $1,000 to $1,100 psf on average. 'There's currently a shortage of such condos in this sort of price range,' he observed.
'The project will be pitched as a mid-market condo located in the city-fringe, Mountbatten/East Coast area. If you cannot afford the Sentosa Cove lifestyle, this is a very good alternative,' Mr Ong said.
Going by current market prices, Ho Bee/NTUC Choice Homes should not find it challenging to achieve their target selling prices. Wing Tai is said to have achieved an average price of $1,500-1,600 psf for its freehold condo near Kallang Riverside which it began selling in April and which is now fully sold.
Ho Bee's and NTUC Choice Homes' proposed condo at Dakota Crescent will be 18 to 20 storeys high and have about 370 apartments comprising two, three and four-bedders. The project is slated for launch by mid-2008.
'This is not a traditional upgrader's market if you look at the site's attributes - it fronts the Geylang River, is across the low-rise Goodman Road area and just about 100 metres from the Dakota MRT Station which will be linked by the Circle Line to Suntec City,' Mr Ong said.
'The site is also near the future Sports Hub and is easily connected to Nicholl Highway, PIE and ECP.'
The top bid by Ho Bee/NTUC Choice Homes of $228.89 million or $524 psf ppr was just 3 per cent higher than the second highest offer of $508 psf ppr, which came from IOI Land unit Multi Wealth (Singapore). GuocoLand was in third position, with $475 psf ppr.
CapitaLand teamed up with US-based Wachovia Development Corporation to cast a $466 psf ppr bid. Other contenders included Frasers Centrepoint ($451 psf ppr), Allgreen Properties & Hoe Seng Company ($430 psf ppr), City Developments, Sim Lian Land and Keppel Land. Wing Tai placed a joint bid with United Engineers unit Greatearth Developments.
