Little-known firm makes top bid for Hillview site

Straits Times: Wed, Mar 07

A LITTLE-KNOWN company owned by three Chinese nationals has trumped six rival developers to lodge the highest bid for a high-rise condominium site in Hillview Avenue. Kingsford Development tendered $243.2 million, or $638 per sq ft per plot ratio (psf ppr), for the 136,148 sq ft site - well ahead of the predicted range of $500 to $550 psf ppr. The firm is owned by Cui Shaoyu, Cui Zhengfeng and Gao Xiuhua, but their personal details are not available. Kingsford's bid was 18.6 per cent ahead of second-placed Flamegold, a unit of UOL Group that offered $205.1 million, or $538 psf ppr. The margin between the top two bids is the biggest since February last year when the tender for the condominium site at Bishan Street 14 was concluded. Industry watchers say the optimism behind the top bid could be based on the strong sales of The Hillier, a project that sold in the same area in April last year. Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, said the offer 'seems to be benchmarked against The Hillier's land price of $673 psf ppr'. However, he noted that The Hillier's price takes into account 'a 15 per cent commercial element' in contrast to the current site, which is purely residential. The 99-year leasehold plot in Hillview Avenue can yield about 370 homes. Mr Lee Sze Teck, senior manager for research and consultancy at DWG Group, noted that all the bids were lower than offers for The Hillier site, suggesting that developers are staying cautious. Mr Nicholas Mak, head of research and consultancy at SLP International, expects the units to break even at about $1,010 to $1,060 psf, while DWG's Mr Lee and Mr Li Hiaw Ho, executive director of CB Richard Ellis, both estimate a range from $1,000 to $1,050 psf. Mr Mak expects units in the new project to be priced above $1,200 psf, while Mr Lee places the figure between $1,200 and $1,250 psf, similar to those at The Hillier. Experts also attribute the competitive bids to the accessibility of the Hillview area to nearby amenities and the Downtown MRT line. Mr Li noted that buyers may be attracted to facilities available at Bukit Panjang and Bukit Batok HDB estates 'which are a short drive away', as well as the adjacent HillV2 shopping mall, to be completed around 2014. The Hillview MRT station that will be completed in 2015 is also likely to be a major attraction, he said. Mr Mak added that 'the area is quiet and peaceful', yet is near major centres like the West Mall. 'It also has quick access to Upper Bukit Timah Road and Bukit Timah Expressway,' he said. However, he cautioned that potential buyers may be deterred by the 'poor accessibility by buses', since 'only SMRT buses would go past the area'. There are also few prestigious primary schools within a 2km radius of the site. [e-mail] Source: The Straits Times Top bid for Hillview Ave site beats expectations            Business Times: Wed, Mar 07 (SINGAPORE) An 'overly optimistic' top bid, a whopping 18.6 per cent higher than the next, was put forth by Kingsford Development for a 99-year residential site located along Hillview Avenue yesterday. Its bid of $243.2 million or $638 per square foot per plot ratio (psf ppr) for the 136,147 sq ft plot with a plot ratio of 2.8 came even as other developers adopted a more cautious stance. The bid may have been pegged to The Hillier's land price of $673 psf ppr when the site was tendered in April 2011, suggested Credo Real Estate executive director Ong Teck Hui. However, The Hillier's land price takes into account a 15 per cent commercial element in the project, which contributed to its achieving the pricing level of its residential units, he noted. Li Hiaw Ho, executive director, CBRE Research, agreed, noting that the success of The Hillier, also on Hillview Avenue, could be the reason for the optimistic top bid for the site. Mr Li expects a breakeven cost of between $1,000 and $1,050 psf. The second highest bid of $205.1 million, or $538 psf ppr, put in by Flamegold Pte Ltd, a unit of UOL Group, was more in line with analyst expectations when the site was released for tender in January. UOL's bid of $538 psf ppr could have resulted in a breakeven price of $900 to $950 psf, which 'could provide the developer with some space to manoeuvre in the event of a softer market', said Nicholas Mak, executive director of research and consultancy at SLP International. 'The top bid for this Hillview site could result in a breakeven price of $1,010 to $1,060 psf. To yield a decent profit, the developer would have to sell the units in the development at prices above $1,200 psf,' he added. An ACRA search shows that Kingsford Development has three shareholders, of whom one is based in Shenyang, China. The third highest bid came from MCL Land, at $190.5 million, or $500 psf ppr. Far East Organization's Astor Properties and Tannery Holdings also put a joint bid with Sekisui House of $176.3 million, or $463 psf ppr. The lowest bid came from Capital Development and Qinghe, at $148.0 million, or $388 psf ppr. 'Although the top bid is 5.1 per cent lower than the previous bid of $672.61 psf ppr submitted by Far East Organization in April 2011, we feel that the bid is a bit optimistic given that it is 18.6 per cent higher than the second bid and the previous site is a mixed use site while this is a pure residential site. We noticed that all the bids are slightly lower than the previous bids for The Hillier site which means that developers could be adopting a cautious stance,' said Lee Sze Teck, senior manager for research and consultancy at DWG. As evidence that the mass residential market is still buoyant, Bartley Residences, located next to Bartley MRT Station, sold 210 units out of the 240 units released to date. Source: Business Times