Sengkang West Way site attracts strong interest

Sengkang West Way site attracts strong interest

A 99-YEAR leasehold private residential land parcel at Sengkang West Way drew a top bid of $262.1 million, or about $488.84 per sq ft per plot ratio (psf ppr).

The site was launched under the Government Land Sales programme by the Housing Board (HDB) on Feb 28.

UOL Group unit Secure Development made the highest bid for the approximately 179,900 sq ft site, which has a maximum gross plot ratio of 3.0.

The site's maximum gross floor area is just over 536,000 sq ft. The top bid slightly exceeded analysts' earlier expectations, which were in the range of $400-450 psf ppr.

Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, said: "It shows that developers are confident of demand for mass-market homes being sustained following the cooling measures imposed in January."

Nicholas Mak, executive director of research and consultancy at SLP International, added that sites such as Sengkang West Way with water views are generally popular with developers and homeowners.

UOL's bid was 3.4 per cent higher than the next highest bid by Bayfront Land, a joint venture between Aspial Corporation and Fragrance Group Ltd.

They bid $253.6 million for the site, which translates to $472.89 psf ppr.

Bids also came in, in descending order, from a joint venture - between Frasers Centrepoint's FCL Topaz, Far East Organisation and Sekisui House - and Qingjian Realty, among others. CapitaLand's Athens Residential Development submitted the lowest bid, at $111 million or $207.01 psf ppr.

The sale drew a total of eight bids, in line with the more optimistic expectations of analysts.

Desmond Sim, associate director at CBRE Research, said the healthy response to the sale pointed to developers' "need to replenish their respective land banks".

UOL president Liam Wee Sin said the developer planned to build a 20-storey development comprising around 600 units on the plot, hoping to "tap the upgrader demand in the north and north-east of Singapore".

Analysts estimate a break-even price of around $900 psf for the site, and expect UOL to launch the project at $1,000-1,100 psf.

Sungei Punggol, Sengkang Sports and Recreation Centre and Sengkang Riverside Park are located near the site.

Also in the vicinity are several other residential developments, including executive condominium (EC) H20 Residences and another upcoming EC site, both developed by City Developments.

H20 Residences was launched in March 2011 and is selling at around $950 psf.

Mr Ong said the Sengkang West area was "generally less crowded in terms of competition".

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