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FRASERS Centrepoint Ltd, which has emerged as the highest bidder for a condo site near Novena MRT Station with a bid of $238 million or $507 per square foot of potential gross floor area, is looking into setting aside units in the new development for serviced residences.

Frasers Centrepoint's top bid for the 99-year leasehold plot at Sinaran Drive is nearly 18 per cent more than the second highest bid of $202 million by Hong Leong Holdings' unit, Kingston Development. The state tender which closed yesterday also attracted two other bids - one from Far East Organization and the other from a partnership involving Wing Tai, NTUC Choice Homes and United Engineers unit Greatearth Developments.

While the 18 per cent premium Frasers Centrepoint offered over the closest competitor seems hefty, market watchers reckon the property arm of listed Fraser & Neave could still make a decent profit. Its breakeven cost for the development is expected to be about $800 psf. A new condo project on the site could fetch $1,000 psf on a project-average basis if it were ready for launch today, reckoned Jones Lang LaSalle's regional director and head of investments, Lui Seng Fatt. 'This is a 99-year leasehold site but it is an MRT location and with several nearby malls,' he added.

Next to the Sinaran Drive site, Novena Square is being revamped into a sports/lifestyle mall, Velocity@Novena.

Just behind that, Far East is developing Singapore's first Korean-themed mall, Square 2. Across the road is an existing mall at United Square. Frasers Centrepoint CEO Lim Ee Seng said yesterday the group is planning a 450-500 unit development reaching over 40 storeys. The units will be mostly smallish, targeting the yuppy market. 'We're looking at an iconic development,' he added.

The Urban Redevelopment Authority (URA) yesterday confirmed that the site, which is zoned for residential use, may also be used for serviced apartments.

Frasers Centrepoint's Mr Lim, when asked about this, said: 'This is an excellent site for serviced residences. We'll seriously consider setting aside part of the development for serviced residences, while the rest could be apartments for sale.'

Frasers Centrepoint has a serviced residences arm.

The 134,209 sq ft site has a 3.5 plot ratio, which means it can have a maximum gross floor area of nearly 470,000 sq ft.

The top bid of $507 psf per plot ratio for the site was 37 per cent higher than the minimum price acceptable to the state for the reserve list site. Frasers Centrepoint's price is 24 per cent below the $665 psf ppr that Wing Tai paid for the Newton Meadows freehold site a few months ago, observed JLL's Mr Lui.