Multiple-Lease Option Site Attracts 23 Bids

RESIDENTIAL MARKET

Multiple-lease option site attracts 23 bids

The first-ever residential site launched with multiple lease options at Jalan Jurong Kechil in the Upper Bukit Timah area has received an overwhelming response from developers - attracting 23 bids for the 1.02-hectare land parcel.

The highest bidder was World Class Developments (North), a subsidiary of Aspial Corporation, which bid $73.8 million or $481.51 per square feet per plot ratio (psf ppr).

Only one bid was tendered for the shorter lease term of 45 years while there were none for the 30-year tenure, the third option offered by the Urban Redevelopment Authority (URA).

The top bid of $73.8 million is 10.3 per cent higher than the second highest bid of $66.9 million by CEL Property.

Most bids clustered around the median bid of $246 psf ppr, ranging from $198 to $302 psf ppr.

The lowest bid came from Kwan House, with a bid price of $23.3 million or $151.99 psf ppr for a 45-year lease. URA indicated that the 60-year leasehold equivalent of Kwan House's bid would be $25.6 million or $169.3 psf ppr.

Property consultants BT spoke to expressed surprise at the number of bids, saying the site received the highest number of bids since the Westwood Avenue residential site, that closed in December 2009 with 32 bids.

 The experience of existing properties with substantially run-down leaseholds is that most buyers are less keen on them due to concerns about long-term value depreciation. However, the keen competition among bidders in this tender shows that they are confident of demand despite the shorter leasehold.

In a statement released by Aspial Corp yesterday evening, the management said they would explore various development options which include condominium and retirement housing.

But ERA Realty key executive officer Eugene Lim felt the high price and competitive bidding reflected the location of the land parcel. "It is located in an established residential estate. It has a tranquil environment, is close to the nature reserve and is attractive to residents who prefer serenity," he explained.

He expects the selling price to start from $1,100 psf owing to the average selling price of $1,600 for a one-bedroom unit at Suites at Bukit Timah, which is located down the road from the land parcel.

Mr Lim added that the development will likely consist of small units with an affordable quantum that targets investors, and it is likely to be popular among those looking to gain a foothold in the Bukit Timah area.

Source: Business Times –16 November 2012