Residential: Overwhelming response to the launch of Caspian project

According to The Business Times, Frasers Centrepoint sold over 300 units out of a total 712 units in its 99-year leasehold Caspian project located next to Lakeside MRT during phase 1 launch over the weekend. The initial 200 units were sold at ASP of S$580 psf and the next batch of 100 units were sold at an ASP of S$ 600 psf. Locals living in the Western part of Singapore formed the majority of the buyers accounting for more than 90% of purchases. Around 78% of these buyers were HDB upgraders. Of the total units sold thus far, about 30% have been sold under the interest absorption scheme at a price 3% above the regular scheme.

The site was bought by Frasers Centrepoint in late 2007 for S$248 psf per plot ratio. We estimate breakeven to be around S$540 psf, with Frasers Centrepoint making a slim profit. Next to Caspian, units at Lakeholmz are selling at about S$600 psf on average in the resale market. Further away, units at The Lakeshore are fetching about S$750 psf on average.

We believe that astute pricing and the government's plans for the development of the Jurong Lakeside district drove demand for the units at Caspian. We view the selling prices for Caspian as a good data point supporting base formation for the mass market.


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