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RESIDENTIAL PLOT: Boon Lay site draws lukewarm response

A WEAK response to a residential site tender at Lakeside has caught the industry by surprise – given that suburban centres have been touted as the next property hot zones.

The 99-year leasehold site bounded by Boon Lay Way and Lakeside Drive had attracted only two bids by the time of the tender’s close yesterday, said the Urban Redevelopment Authority (URA).

The top bid was put in by Frasers Centrepoint at $205.6 million – or $248 per sq ft per plot ratio (psf ppr) – for the 236,731 sq ft site. First Capital Holdings put in the other bid at $191 million or $230 psf ppr.

The site, with a gross floor area of 828,552 sq ft, is just five minutes from the Lakeside MRT station, with views of the Chinese Gardens and Japanese Gardens next door.

With its convenient location and future URA plans for Jurong East to become a regional hub for the west of Singapore, ‘it is surprising that there were so few bids’, said Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong.

A possible reason for the lukewarm response could be rising building costs, he said. ‘For mass market homes, if construction costs escalate, the profit margin shrinks and the project becomes very unattractive.’

CBRE Research executive director Li Hiaw Ho said the new site is likely to break even at about $600 psf, and may sell for between $700 psf and $800 psf.

 

Source: The Straits Times 13 Dec 07

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