Power of North Gem!!!
I hope this new property will be injected into FCT.
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 “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.
