Third reserve site triggered for sale this month

A Developer has committed to bid at least $390 million for a reserve site in Prince Charles Crescent - the third such plot triggered for sale this month.

The 2.38ha residential parcel near Redhill MRT station will now be put up for sale, the Urban Redevelopment Authority (URA) said yesterday.

The bid works out to $725 per sq ft per plot ratio (psf ppr). Experts say the regular-shaped site in Prince Charles Crescent within the prime residential area is expected to attract healthy interest from bigger players. It can yield about 590 apartments.

While the 99-year leasehold plot is attractive, the hefty overall quantum is likely to limit the number of bidders, although bids could hit $500 million.

Experts said developers who build mainly in the mid-tier to high-end segments are keen on triggering city fringe and city centre sites, as most plots on the confirmed list of the government land sales programme are in suburban areas like Punggol and Jurong.

Bidders for the Prince Charles Crescent site is expected to be cautious, given the muted performance of projects in the central region over the past year.

The requirement to build and sell all units within five years to avoid paying the additional buyer's stamp duty will also dampen bids.

A winning bid of $430 million to $457 million - or $800 to $850 psf ppr - is expected with up to six bidders.

Recent transacted prices of two newer condos near the site - Ascentia Sky and The Metropolitan Condominium - have hit about $1,300 to $1,400 psf, he noted.

ERA Realty key executive officer Eugene Lim called the site's location "supreme". He expects selling prices to begin at $1,500 psf and bid prices to come in at between $900 and $930 psf ppr, or $484 million to $500 million.

EL Development managing director Lim Yew Soon acknowledged that while the location is very attractive, the affordability of the end-product must be taken into consideration as well.

Source: The Straits Times – 31 July 2012