Choa Chu Kang EC tender draws 11 bids

SINGAPORE — An executive condominium (EC) site at Choa Chu Kang Avenue 5 received 11 bids at the close of tender yesterday, which property analysts said signalled developers’ continued enthusiasm towards the hybrid-housing type despite the segment’s recent slump.

The highest bid of S$156.2 million, or around S$295 per square foot per plot ratio (psfppr), was tabled by a consortium comprising Qingjian Realty, Suntec Property Ventures and Bohai Investments.

“The top bid by the Qingjian joint venture was 7 per cent higher than the next highest bidder. This was rather bullish, considering that 8 out of the 11 bidders placed a bid of less than S$250 psf of GFA (gross floor area) for the site,” said Mr Eugene Lim, key executive officer of property agency ERA. He said units in the new development could be sold below S$800 per sqf.

The 99-year leasehold parcel has a site area of around 176,378sqf. With a plot ratio of 3, it has a maximum gross floor area of 529,135sqf and can yield about 490 EC units.

Demand for ECs has waned following the implementation of property curbs for the hybrid-housing type in December 2013, such as the Mortgage Servicing Ratio cap and resale levy. Developers are also only allowed to launch units for sale 15 months after securing the land or completing the physical foundation works.

However, analysts said one possible bright spot for the EC segment is the likely increase in the income eligibility ceiling from the current S$12,000. The Government is expected to make an announcement soon.

“This tender closed at a time when the income ceiling revision for eligible buyers is being discussed. Any positive revision could benefit the winning bidder when the project is launched,” said Mr Desmond Sim, head of CBRE Research for Singapore and Southeast Asia.