Funds that bought 53 Grange Infinite units in bulk purchase file suit

INVESTORS who bought 53 units at the upmarket condo Grange Infinite in the Orchard Road area have launched a High Court action claiming they are not as luxurious, stylish or elegant as promised.

In a litany of complaints, the buyers – a group of investment funds which spent $388 million in all – also say the fittings in the units are not ‘exceptionally superior’ as advertised.

In a rarely seen showdown, the funds – managed by ARA Asset Management – issued a writ of summons last month against Grange Properties, an associated firm of listed developer Chip Eng Seng.

Investors who buy apartments in bulk might attempt to sell the units individually to secure higher prices or offload them en bloc as prices head north.

The Grange Infinite bulk purchase was done at a discounted price of about $2,600 per sq ft. — ST PHOTO: CAROLINE CHIA
The funds allege breaches of some terms in the sales and purchase agreement and misrepresentations in relation to the bulk sale in March 2008.

While disputes between owners and developers are not uncommon, the escalation of such disputes to legal action is rare, as developers are usually keen to protect their reputations, experts say.

For example, in February, City Developments was sued by residents of Emery Point, who had accused it of being negligent over defects there. The case was ultimately resolved amicably out of court.

ARA claims marketing for the 68-unit Grange Infinite said it would be of ‘exceptionally high standard of luxury, style and elegance’ and have exceptionally superior furnishings. Australian architecture firm Hassell was also to have played a significant part in the project, the writ said.

However, these claims were untrue and the representations were made either fraudulently or negligently, the statement added. Hassell did not have a significant role in the construction and the project had numerous design flaws, it said.

These included the lack of a smoke extraction system at the outdoor cooking area and a spa pool located right next to it, resulting in a lack of privacy for groups using both facilities concurrently.

The writ also said the project was neither safe nor fit for human habitation at the time of notice of vacant possession, as stainless steel handrails and studs supporting balcony glass barriers and elsewhere were incompletely welded.

This posed a danger to residents, it claimed, as the barriers could dislodge and fall from the balconies. Any rectification was also carried out in a sloppy and slipshod manner with no regard to aesthetics, it said.

The funds carried out improvement works on some of the units to make them more saleable – and intends to do so for the rest of the unsold units as well.

Losses and expenses will be incurred as a result of missing out on potential buyers and hiring experts to look at the defects, among other things, they say.

ARA made the bulk purchase at a discounted price of about $2,600 per sq ft (psf) even as some units were individually sold for about $3,200 psf then.

Twelve of their units were sold before the project was completed, leaving 41 units that are now the subject of the suit. Three were sold after improvement works, leaving 38 units still in the funds’ possession.

In its defence issued on Monday via its lawyers, however, Chip Eng Seng denied all allegations, emphasising that the plaintiffs are sophisticated and experienced property investors.

It maintained that the development has attained ‘an exceptionally high standard of luxury’ and that the funds had entered into the bulk purchase partly due to the discounted price.

Each unit, for example, is served by a private lift and equipped with fittings from high-end brands such as Gaggenau for its kitchen appliances.

On the incomplete welding of the stainless steel handrails, Chip Eng Seng said it took immediate steps and the issue has been – or is nearly – resolved. Hassell is also the architect that designed the project, the firm maintained.

The 36-storey upmarket condo is on the former Grange Tower site, next to the Indian High Commission. It was jointly developed by Chip Eng Seng and Citadel and completed this year.

Chesterton Suntec International research head Colin Tan said that the potential loss for ARA might have been huge for them to resort to legal action for a project that they are trying to sell.

‘It could be because the luxury market is not moving and prices have not recovered. This is compounded by the fact that the development is already completed.’

Just this month, Chip Eng Seng granted an option to purchase the remaining 2,368 sq ft unit at Grange Infinite for $6.6 million – or $2,808 psf.

Luxury non-landed home prices are still about 6 per cent below their 2008 peak, despite the property boom that has seen all other segments surpass their historical highs.

In fact, some high-end projects are still struggling to find buyers despite already being completed, as sales volumes and interest remain relatively muted.

Source: Straits Time, 19th Aug 2011

EXECUTIVE condos (ECs), a hybrid of private and public housing, led the charge in home sales last month as buyers looked for affordability in the midst of sky-high prices.

Last month, 568 EC units – largely at Blossom Residences in Bukit Panjang and RiverParc Residence in Punggol – were sold to buyers such as HDB upgraders.

This is the most monthly EC sales recorded since they were reintroduced last October after a five-year drought. Only 212 EC homes were sold in June.

This strong performance led to sales of new private homes, including ECs, rocketing 40 per cent to 1,954 units sold last month, up from 1,394 units in June.

Excluding ECs, sales jumped a more modest 17 per cent to 1,386 homes.

Mr Ong Teck Hui, Credo Real Estate’s head of research and consultancy, said this shows the still ‘firm demand’ for ECs by the middle-income segment, often called the ‘sandwich class’.

However, they have to be priced reasonably at about 20 per cent lower than mass market private condos, he added.

RiverParc’s 322 units sold had a median price of $694 per sq ft (psf) while Blossom Residences sold 192 units at $702 psf. By comparison, one of the latest mass market projects, Boathouse Residences in Hougang, had an average price of $880 psf during its launch.

While 54 per cent of sales were suburban homes, city fringe homes also saw greater buyer interest with 510 units sold, more than double June’s sales figures.

Experts say that the higher sales volume could be attributed to some superstitious buyers rushing to commit before the Hungry Ghost Festival, seen by some as an inauspicious time to buy a home.

Low home loan rates and attractive launches last month also helped to support the private market.

Still, experts say the number of homes sold this month could dip below 1,000 units, as buyers re-evaluate their choices given policy changes to public housing such as the raising of the income ceiling and the ramping up of HDB supply as mentioned by Prime Minister Lee Hsien Loong in his National Day Rally speech on Sunday.

Ms Tay Huey Ying, a research and advisory consultant at Colliers International, said that in spite of the pick-up in buying last month, sales volume still lagged behind launches.

‘This is a positive sign that the slew of government cooling measures, including the ramping up of supply of both private and public homes, has continued to work to stem buying exuberance,’ she added.

Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia, noted that a similar trend was also seen in the past two years where a run-up in sales was recorded before falling in the month of the Chinese festival itself.

‘August should see a marked slowdown given that the entire month coincides with the Hungry Ghost Festival and also with the Government’s latest round of policy adjustments. Sales could hit 900 to 970 units,’ he added.

This is, however, conditional on further global and local market conditions, Dr Chua emphasised.

Experts are, however, divided on how the residential market might perform in the later part of the year.

Some expect sales to moderate due to uncertainties in the global economy.

But others feel that low interest rates likely to last till 2013 will be the carrot for investors to step out of the sidelines in spite of the risks.

‘The fleeing of hot money from the troubled Western nations in search of safer investment haven… could also be another bright spot for the private home sales market,’ Colliers’ Ms Tay said.

She expects demand for new homes to rebound, averaging at 1,200 homes a month in the final months of the year.

Last month’s top selling projects included Skyline Residences in Telok Blangah with 167 units sold at a median price of $1,902 psf and The Miltonia Residences in Yishun with 124 units sold at $871 psf.

An artist’s impression of Skyline Residences, which was one of last month’s top-selling private home projects with 167 units sold at a median price of $1,902 psf. — PHOTO: KNIGHT FRANK

Source: Straits Times, 16th Aug 2011

Projects will come mainly from Government Land Sales programme

MORE than 10,000 new private homes are expected to hit the market over the remainder of the year, according to a new report.

Property consultancy Savills said these projects will mainly come from the Government Land Sales (GLS) programme with most of the upcoming homes catering to the mass market segment.

Based on the 8,000 units, including executive condominiums, put up for sale in the first five months this year, Savills estimates the total this year will surpass the 18,000 – including executive condominiums – launched for sale last year.

The Urban Redevelopment Authority (URA) has said the expected supply of new homes poised to hit the market over the next few years could be as high as 53,000.

Mr Alan Cheong, Savills’ head of research, said it could take around four to five years for the market to fully absorb these unsold homes. His calculations are based on the average annual take-up over the past five years of about 12,000 new homes.

Data compiled by Savills shows that 17 per cent of the homes will be in neighbourhoods along the city fringe such as Thomson and Bendemeer while 70 per cent will be in suburban areas, including Tampines, Bishan and Upper Serangoon. These are mainly GLS sites.

The remaining 12 per cent will be in city centre areas like Newton, Holland and Orchard Road. These mainly come from private land sales.

The large number of homes to be put up for sale later this year suggests that developers may be keen to launch their projects soon due to uncertainty about the global economy and the outlook for the property sector.

Another factor is that many of the sites are from the GLS programme.

Mr Lim Yew Soon, managing director of EL Development, said developers who have bought GLS sites are less likely to hold back from launching their projects.

He said: ‘The Government is still releasing a lot of land so it doesn’t make sense to hold on to the site and wait.

‘GLS sites also come with a condition that the land must be developed within five years of its sale, so developers can delay their launches for up to two years but anything longer than that is not possible.’

Analysts are still cautiously optimistic that the buying momentum experienced so far this year will continue for the rest of the year.

Ms Wendy Tang, Knight Frank’s executive director of residential services, said that while the market is cautious because of the uncertainty about future housing policies, she expects demand for new homes to remain healthy.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said global issues such as the euro zone debt crisis that have been impacting the stock market have also influenced buying sentiment.

‘The recent (euro zone debt) crisis… has now passed. The economic fundamentals present in the first half of this year are still present so I don’t see why the buying shouldn’t continue,’ he said.

Correction to Figures for New Homes:
Possible launches in second half of 2011
Area: Estimated no of units
City: 1,562
City fringe: 2,231
Suburban: 8,963
Source: Savills, URA

Source: Straits Times, 6th July 2011

BUYERS were out in force at a suburban property launch over the weekend.

Seastrand, a 473-unit project in Pasir Ris, moved 103 of the 190 units released during its weekend launch, averaging $877 per sq ft (psf).

The development is a joint venture between Far East Organization and Frasers Centrepoint and consists of one-, two-, three- and four-bedroom apartments. The two-bedroom units, ranging in size from 883 sq ft to 1,066 sq ft, were the most popular, with 54 of 57 units released sold so far.

Dennis Wee Group director Chris Koh said there is still a healthy interest in condominium launches.

‘It’s not unusual to see some projects sell almost 50 per cent of their units over the launch weekend,’ he said.

Eleven@Holland, a cluster-housing project developed by Clydesbuilt Group, sold another two units at the weekend. This brings the total number of homes sold to 16, at an average of $1,050 psf.

The units at the project are four- and five-bedroom houses ranging from 3,692 sq ft to 4,349 sq ft.

The Woods in Jurong, a cluster-housing development, recorded another four sales. This brings the total home sales for the development to 34.

Source: Straits Times, 28th June 2011

But the May figure of 1,575 units is still the third-highest in a year

Terrasse condo in Hougang (right) and Foresque Residences off Upper Bukit Timah were among last month’s top sellers. Terrasse sold 184 units at a median price of $994 per sq ft and Foresque Residences sold 141 units at a median price of $1,108 psf. — PHOTO: MCL LAND, WING TAI HOLDINGS

SALES of new private homes eased 13 per cent from April as buyers turned cautious and developers held back on big launches.

Some market watchers also believe the general election may have had a dampening effect, with some potential buyers taking a wait-and-see approach.

There were 1,575 units sold last month, down from April’s blistering 1,805 transactions, suggesting that the January cooling measures have prevented overheating.

But experts note that last month’s numbers still represent the third-best monthly sales over the past year, topped only by April and an even hotter November, when 1,915 new homes were sold.

If executive condo (EC) sales are included, last month’s number swells to 1,825 units.

The fall in sales from April has reduced the possibility of another round of cooling measures, experts added, although there are signs in the latest figures that demand is holding up quite well.

Mr Tan Kok Keong, OrangeTee’s head of research and consultancy, noted that sales in projects launched before last month were still strong.

Eight Courtyards in Yishun and Hedges Park Condominium in Upper Changi, for example, found buyers for about 210 units in total in May, a month after their initial launches.

But the number of launches fell across the board last month as developers held back releasing new properties while a large amount of stock remained unsold, experts added.

SLP International research head Nicholas Mak noted that the number of launched but unsold units has been creeping up. If ECs are included, this number hit 5,030 last month – significantly more than last year’s average of 3,700 units.

But Mr Mak said this is ‘not a cause for alarm or unmanageable’ as yet, adding that if sales keep up the pace seen so far this year, the supply can be absorbed.

In fact, previously launched units in suburban areas are being mopped up.

Sales at The Waterline near Serangoon and The Lakefront Residences in Jurong last month have recorded a take-up rate of more than 100 per cent. This means the number of units sold is higher than the number launched that month. Suburban home sales have also supported the market, commanding 60 per cent of new home sales.

It is a different story in the city centre, according to Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia, who noted that there have been ‘significant falls’ in both sales and launches.

‘These (94 launched units in the city centre) are the lowest (monthly) number since March 2009 and highlight the existing supply pressure in this market as previously launched units remain unsold.’ Yet a unit at The Marq on Paterson Hill set a price record of $5,842 per sq ft (psf) while 10 apartments in projects such as Tomlinson Heights and The Laurels in the Orchard area were sold for more than $3,000 psf.

Mr Mak said these results do not signal a return of the luxury market as the numbers pale in comparison with the 217 units sold above $3,000 psf in July 2007.

Experts expect this month’s sales to stay healthy although buyers are likely to be more cautious as they await clearer policy directions. The mid-year school holidays could also mean a quieter market.

Colliers International’s director of research and advisory Chia Siew Chuin said this month’s sales are likely to stay above 1,000 but are unlikely to surpass last month’s level.

CB Richard Ellis executive director Li Hiaw Ho added that up to 8,000 new homes may be sold in the first six months of the year, although only 3,796 caveats were lodged between January and last month. This is because lodging caveats is voluntary and is a delayed process.

Last month’s top-selling projects included Terrasse in Hougang, with 184 units moved at a median price of $994 psf, and Foresque Residences off Upper Bukit Timah, which found buyers for 141 units at a median of $1,108 psf.

Source: Straits Times, 16th June 2011

KOP Properties will not lower prices for units at Hamilton Scotts (right), which has seen a take-up rate of about 40 per cent – unchanged since last December. — PHOTO: HAYDEN PROPERTIES

DESPITE slow sales at its high-end Hamilton Scotts condominium, luxury property developer KOP Properties will not lower its prices for the Scotts Road project.

Instead, the company will hold out for buyers who are prepared to pay for quality properties, said chief executive Leny Suparman.

In a telephone interview with The Straits Times last week, she expressed optimism about the luxury home sector.

‘The only way prices can move is up,’ she said. ‘If there are two to three more luxury property launches this year, it will start the trend and people will want to come in and get a slice of the action too.’

While prices in the mass market segment have recovered substantially, luxury property prices are still 20 per cent below the pre-crisis peak, Ms Suparman said.

‘There needs to be this momentum for the ultra-luxury segment as well – it will be positive for the overall market,’ she said.

‘There are lots of people with money but when it comes to selling such properties, I believe you need to be able to feel the space before you can decide whether to buy.’

Ms Suparman was speaking after a KOP Properties unit, Hayden Properties, held a ‘topping out’ ceremony for Hamilton Scotts recently. This marks the final pouring of cement at a property project before completion.

The 30-storey, 54-unit ultra-luxury condo is expected to be completed in the fourth quarter of this year.

In the meantime, it has seen a take-up rate of about 40 per cent – unchanged since last December.

Prices average between $3,600 and $3,800 per sq ft (psf).

KOP Properties said it is in talks with buyers to sell several units in its other development, The Ritz-Carlton Residences.

The project has sold 19 units so far, with the most recent sale in January. Prices for the apartments average between $3,300 and $3,800 psf.

Source: Straits Times, 8th June 2011

99-year Woodlands plot attracts just three bids as HDB releases more land

A RESIDENTIAL site for private homes in Woodlands has fetched a top bid of $152 million in a subdued three-cornered contest among developers.

This came as the Housing Board kept up its drive to boost flat offerings this year by releasing a new site for design, build and sell scheme (DBSS) flats yesterday.

Experts say a move to lift the number of build-to-order HDB flats launched this year to 25,000 would have weighed on developers’ minds as it could siphon demand away from the private market.

The lukewarm interest from developers, however, was due more to the site’s ‘average’ attributes, they added.

A joint venture between Fragrance Group and Aspial Corp put in the top bid for the site at the junction of Woodlands Avenue 2 and Rosewood Drive. The bid worked out to $367 per sq ft (psf) per plot ratio (ppr).

They said in a statement that, if awarded the site, Fragrance will hold a 60 per cent stake in a special purpose vehicle while Aspial will hold the remaining 40 per cent to jointly develop the project.

Second-placed Far East Organization and Sekisui House were just 1 per cent behind with a bid of $150 million – or $363 psf ppr. EL Development was third with a $120 million bid, or $291 psf ppr.

The 99-year leasehold land parcel has a maximum gross floor area of 38,333 sq m and can accommodate a five-storey condo with about 390 units.

Ms Chia Siew Chuin, director of research and advisory at Colliers International, said competition from existing and upcoming projects in the vicinity could have contributed to the tepid response. These include the newly completed Rosewood Suites as well as Far East Organization’s new project Woodhaven at the junction of Woodlands Avenue 1 and Rosewood Drive.

Mr Ong Teck Hui, Credo Real Estate’s head of research and consultancy, noted that the site’s top bid is still 10 per cent higher than that for Far East’s site – which was tendered with a winning bid of $333 psf ppr in November last year – suggesting firm suburban residential land prices.

CB Richard Ellis (CBRE) Research executive director Li Hiaw Ho expects the new project to break even at $700 to $730 psf while Colliers’ Ms Chia expects the units to sell at about $780 to $800 psf.

‘Sub-sales of units in Rosewood Suites were transacted at between $730 psf and $810 psf in the March to May period this year,’ Mr Li said.

The HDB yesterday launched the sale of a site at the junction of Fernvale Link and Sengkang West Avenue. The 22,706 sq m site can yield about 790 flats.

HDB said it will launch another DBSS site at Bendemeer Road with about 700 units later this month.

PropNex corporate communications manager Adam Tan expects the latest site to be sold for $650 to $750 psf ppr.

The site is likely to be popular with developers and buyers as Sengkang is a rapidly maturing estate with shopping centres and established schools nearby, he added. ‘In particular, DBSS flats will present the sandwich group with increased housing options, which will also help ease the demand for public housing as the sandwich group does not have to compete with households earning less than $8,000 for resale flats.’

Separately, another development, Olina Lodge at Holland Hill, launched its collective sale with an indicative price of $225 million yesterday. This works out to $1,575 psf ppr for the freehold site of 7,831 sq m, inclusive of a 10 per cent balcony allocation. Marketing agent DTZ said the 67-unit, four-storey walk-up property can be redeveloped into a 12-storey project with a gross floor area of 134,862 sq ft, according to the 2008 Master Plan.

Owners are expected to get about $2.95 million to $4.9 million each in proceeds – some 65 per cent more than their units’ existing value, DTZ added.

Source: Straits Times, 8th June 2011

A CONDOMINIUM site in Buangkok has secured a top bid of $247 million in a four-way tussle among developers.

The moderate level of interest was in line with market expectations.

Qingdao Construction lodged the top bid of $247 million – or $391 per sq ft (psf) per plot ratio (ppr) – for the 19,549 sq m site at the junction of Buangkok Drive and Sengkang East Drive.

Frasers Centrepoint unit Opal Star and Lum Chang Building Contractors came in just a shade lower at $239.8 million – or 3 per cent shy at $380 psf ppr.

Centurion Re was third with a bid of $196.9 million, while Best Desire Investment, which is not incorporated in Singapore, rounded out the four with a $145.2 million bid. This works out to $230 psf ppr, 41 per cent lower than the top bid.

Experts say both the tender participation level and top bid were within market expectations. They had earlier estimated a top bid of $320 psf ppr to $450 psf ppr and up to six bids.

The site is adjacent to the Austville Residences executive condominium (EC) and is a short walk to Kangkar LRT station and the shopping outlets at Rivervale Plaza, CB Richard Ellis Research executive director Li Hiaw Ho said.

Austville Residences, developed by a tie-up between United Engineers and Lee Metal Group, won the tender for the EC site last year at $321 psf ppr.

Mr Li said the 99-year leasehold site with a maximum gross floor area of about 59,000 sq m can be developed into a condominium development of about 20 storeys with 550 units.

A new project will break even at about $760 psf to $780 psf, he added. ‘Currently, units in H2O Residences at the junction of Sengkang West Avenue and Fernvale Link are being marketed at the median price of $940 psf. Some 330 units of this 521-unit condo have been sold to date.’

Mr Ong Teck Hui, Credo Real Estate’s head of research and consultancy, said the moderate tender response and bids are in line with the site’s attributes.

‘It’s a site in the less busy part of Sengkang and Upper Serangoon, away from amenity hubs and MRT stations,’ he said.

In November last year, a site at Serangoon View, about 500m away, also attracted only four bidders but achieved an even lower top bid of $320 psf ppr.

Mr Ong expects the average selling price of the project to range from $800 psf to $850 psf.

Source: Straits Times, 3rd June 2011

Pent-up demand will ease and property prices should fall, say analysts

BUILDING more HDB flats, and doing so more quickly, will help ease pent-up demand and may also eventually reduce home prices, say property analysts.

They also believe the impact of building 3,000 more new HDB flats this year could cascade right through the market, affecting both HDB and private homes.

They say the additional new flats, and the move to cut waiting times, would help ease pent-up buying demand.

These analysts also anticipate a softening of prices for resale flats and even mass market private homes.

They note that recent build-to-order (BTO) HDB projects had been oversubscribed, sometimes by as much as seven times the number of flats on offer.

The flood of new homes could mean buyers who had been looking at resale HDB flats would turn to new flats.

‘Those who have been looking to the resale market because they didn’t want to wait for a BTO flat, they might shift their focus back. Especially with the easing of the income ceiling, it would also change the minds of some people,’ said Ms Chua Chor Hoon, DTZ head of South-east Asia research. The Government has flagged a move to ease the $8,000 a month income ceiling for buying new flats.

Associate Professor Sing Tien Foo, of the National University of Singapore’s department of real estate, said the knock-on effect of the new supply might not be confined to just resale HDB flats.

Some buyers now looking at private mass market homes might switch their attention to resale HDB homes.

‘Both the public and the private housing sectors are interlinked. So it’s not just mass market. Prime property could also be affected,’ said Ms Chua.

‘I expect prices to soften slightly but it will be a gradual movement. Cash over valuation (COV) will be hit first, and once it moves down even further, then prices will eventually be hit as well,’ she said.

Any price effects will take at least two to three years to filter through, said Prof Sing. It will take some time for the public sector to absorb the pent-up demand.

The additional 3,000 new HDB flats to be launched this year will make a total of 25,000 new flats. If this pace of building continues, it will signify the launch of a large supply of new public homes in the next few years. Dr Chua Yang Liang, head of research at Jones Lang LaSalle, said that this would help ease the immediate shortage but would also coincide with the anticipated oversupply of private homes expected to hit the market within that same period: ‘This could become an issue if it becomes a reality.’

Prof Sing agreed on this point: ‘It depends on exactly how much pent-up demand is in the market. But it won’t be difficult for the HDB to predict because they would have numbers on how many people are in the queue.’

But he said sizing up the actual demand could be more complicated.

‘Even though projects have been oversubscribed, there have also been a lot of people who have rejected the chance to select a new flat. You have to look at what is the effective take-up rate as well.’

Some market experts say the move to provide more new homes might result in a muted response.

Dennis Wee Group director Chris Koh said although it will ‘solve some unhappiness’, buyers who look to the resale market have different needs from those looking at snagging a new flat.

‘There will be some who are sitting on the fence who will be convinced to choose BTOs but there will always be those who will definitely stick to the resale market,’ he said.

Source: Straits Times, 28th May 2011

Top tender well ahead of market expectations of $154m-$165m range

SIX developers squared off for a residential site in Sembawang with the top bid coming in at $191.8 million, well ahead of market expectations.

The site at the corner of Sembawang Road and Jalan Sendudok is near Sembawang Shopping Centre and Sembawang MRT station – key attractions for developers and home buyers.

Hao Yuan Investments, controlled by Singaporean permanent resident Du Zhen Zeng, lodged the top bid, which equates to $460 per sq ft per plot ratio. Little is known about Mr Du, who lives in a bungalow at Sentosa Cove.

Analysts had predicted the top bid would fall somewhere between $154 million and $165 million.

A joint venture between Fragrance Group and Aspial Corporation was second on $172.6 million. Hong Leong Group, a team of Frasers Centrepoint and Far East Organization, Hoi Hup Realty in league with Sunway Developments and Allgreen Properties were also in the running.

The 99-year leasehold site is on 297,789 sq ft and can be built up to a maximum gross floor area of 416,908 sq ft, yielding about 390 units.

Analysts estimate the breakeven cost could hover around $800 psf with average selling prices at $900 psf.

CBRE research director Li Hiaw Ho said: ‘The confidence in this site could be attributed to the good response to Canberra Residences and more recently, Eight Courtyards at Yishun Avenue 2.’

Canberra Residences, which is closer to Sembawang MRT station than the Jalan Sududok site, has sold about 85 per cent of its 320 units at an average of $830 psf. The nearby Eight Courtyards has moved 75 per cent of its 654 units since its April launch, with prices averaging $800 psf.

Private home sales were robust last month, rising 29 per cent from March to a five-month high of 1,788 units.

Credo Real Estate’s head of research and consultancy, Mr Ong Teck Hui, said the figures point towards healthy demand, especially in the suburbs. This segment has become more active with recent launches like Hedges Park Condominium, Foresque Residences and Terrasse.

‘The tender response also shows the market is not too concerned about the impending upward revision in the HDB income ceiling,’ he said. ‘(Developers) probably feel that any impact on the private market… would be manageable.’

Source: Straits Times, 27th May 2011