Wednesday, April 12, 2006
Tanah Merah site draws strong bids
THE surprisingly high bids for a huge parcel of residential land in suburban Tanah Merah are being seen by some experts as a sign that the market for lower-end homes is picking up.
The 99-year leasehold plot at Tanah Merah Kechil Avenue near the Tanah Merah MRT Station was the subject of aggressive bidding in a tender that closed yesterday.
A 70:30 venture between NTUC Choice Homes and Wing Tai Holdings tendered the highest of the seven bids - $210 million. This equates to about $319 per sq ft (psf) of potential gross floor area for the 21,876.8 sq m site. There are plans to build about 550 units, said NTUC Choice Homes.
Chip Eng Seng and its partner have tendered $204.39 million or about $310 psf per plot ratio (ppr). Far East Organization put in the third highest bid - of $199 million or $302 psf ppr.
While these price levels would not set pulses racing in prime areas, they are certainly raising eyebrows in the outer suburbs.
'With these bids, the developers seem to be looking at a 10 per cent rise in mass-market prices in the next nine to 12 months,' said Mr Nicholas Mak, head of research at property consultancy Knight Frank.
The market is trending upwards, but low-end property has been the poor cousin while prices of high-end niche homes have jumped.
Some consultants have predicted a price increase of 1 to 6 per cent for mass-market homes this year, compared with 6 to 10 per cent at the high end.
The top three bids show that developers expect prices of leasehold suburban projects to start rising, said the executive director of consultancy CB Richard Ellis, Ms Soon Su Lin.
She said the top bid was above the $282 psf ppr paid in 1997 for the East Meadows site right next to the Tanah Merah block.
'The top three bidders are very bullish... they're looking at pent-up upgraders' demand in the area,' said Chesterton International research head Colin Tan.
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// posted by Shajahan @ 10:53 AM 