Top bid of $38.5m for popular plot comes from Kheng Leong unit Chappelis
A LANDED housing site at Jurong West put up for sale by the government drew a whopping 32 bids at the close of the tender yesterday.
The top bid of $38.5 million or $254 per sq ft of land area came from Chappelis, a unit of Wee Cho Yaw’s privately held Kheng Leong.
The huge interest in the 151,759 sq ft site is a stark turnaround from last year. The 99-year leasehold parcel was put up for tender in March 2008 via the government’s confirmed list, but was not awarded because the two bids tendered – $11.8 million and $10.3 million – were considered too low. The top bid then worked out to just $78 psf of land area.
This time around, the site was placed on the reserve list and put up for tender only after an unnamed developer committed to bid at least $15 million, or $99 psf.
‘Now the residential market is performing well, the limited supply of landed sites for development has created substantial demand for this site,’ said Li Hiaw Ho, executive director at CBRE Research.
Market watchers also said the site proved popular because it is small, which means smaller players submitted bids because the amount they would have to fork out would not be too high.
However, there were far more bids than the 10 that most analysts had expected.
‘I’m astounded by the number of bids,’ said Chesterton Suntec International’s research and consultancy director Colin Tan. To meet the strong demand for landed housing plots indicated by this tender, the government might want to release more such plots next year, he added.
Kheng Leong’s bid is just one per cent higher than the next highest bid of $38 million, submitted by Hoi Hup and Malaysia’s Sunway group. But the top bid is 129 per cent higher than the lowest bid of $16.8 million by Boon Keng Development. Boon Keng put in the higher bid of $11.8 million in last year’s tender.
CBRE’s Mr Li said that based on the top bid, terrace houses on the site would be priced around $1.25-1.3 million each. Currently, houses in the nearby Westville and Westwood landed estates are sold in the resale market at $850,000 to $1.1 million each, he pointed out. Another alternative for Kheng Leong would be to build cluster housing.
‘Potential buyers could comprise locals working at manufacturing firms in Jurong and Tuas, as well as academics at nearby Nanyang Technological University,’ Mr Li noted.
The plot is surrounded by other landed estates such as Westwood Park and The Floravale condominium and is near the Pan-Island Expressway.
Source : Business Times – 9 Dec 2009
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