Tuesday, 10 September 2013
SINGAPORE — A mixed commercial and residential site in Yishun
attracted a top bid of S$1.43 billion from Frasers Centrepoint units at
the close of tender yesterday, HDB data showed, well above the competing
bids in a provisional result that took analysts by surprise.
The
99-year leasehold site, made available through the Government Land Sales
programme, was put up for tender in June. The site sits on 442,234 sq
ft of land and has a maximum permissible gross floor area of almost 1.33
million sq ft. The top bid from North Gem Development and FC North Gem
Trustee works out to S$1,077 per sq ft per plot ratio.
The development, next to Yishun MRT Station and to be
integrated with the future Yishun bus interchange, can yield about 890
homes, with a maximum of 522,000 sq ft for commercial use. About 43,000
sq ft has to be set aside for a community club.
The top bid is
47.4 per cent higher than the second-best bid of S$969.3 million from a
Far East Organisation-led consortium, with the other three bids of S$930
million, S$875 million and S$704.5 million coming from Zenlead
Investments, Sim Lian and Yorkshire respectively.
“The wide price
gap illustrated Frasers Centrepoint’s determination to protect its
market position in the Yishun area as Northpoint Shopping Centre, the
current shopping mall at Yishun Central, is managed by Frasers
Centrepoint Trust,” said Mr Nicholas Mak, Executive Director of Research
and Consultancy at SLP International Property Consultants.
Mr Ku
Swee Yong, Chief Executive Officer of International Property Advisor,
said Frasers would enjoy a strategic advantage as it will be able to
integrate the new development with Northpoint, but he was still
surprised by the gulf between the top two bids.
“Frasers will
enjoy many synergies and besides the heavy footfall in the area, they
will be able to drive traffic to their Northpoint to increase returns.
But I thought it would be at most 20 to 30 per cent over the second
bid,” he said.“It’s clear they needed certainty of winning the bid,” he added.
Mixed developments next to MRT stations have been a proven success formula, noted ERA Executive Officer Eugene Lim.
Still
he noted that “Junction 9 - the other mixed use site at Yishun Ring Road had CEL
Property as the highest bidder at S$212.1 million or S$794 psf ppr. The
tender attracted 13 bidders in January. This makes the current site 35.6
per cent more expensive than the Yishun Ring Road site.”
He
estimated the break-even at just below S$1,500 psf, saying the
developers would have to sell at S$1,600 to S$1,800 psf to account for
profit. Mr Ku said the synergy and the enhanced value to the
commercial elements of the project will allow the developer to price the
residential component at about S$1,300 psf.
