Strong developer interest for Chestnet venue Site

According to The Business Times, Chestnet Avenue in Bukit Panjang,a 99-year leasehold site in the state's reserve list which was triggered for launch last month received impressive 13 bids for its residential site reflecting the renewed interest and the growing positive outlook among developers for mass market residential projects. The top bid of S$143.7m or S$280 psf ppr put in by two companies in the Hong Leong Group was much higher than analyst expectation of bid levels of S$200 psf ppr. Far East Organization made the next highest bid of S$129.1 million, or S$252 psf ppr.

We estimate a breakeven price of around S$550 psf. Assuming a 10%-15% margin, the selling prices are expected to be around S$600-S$640 psf. Although the bid is above expectations, we believe that the expected selling prices are achievable. The strong interest from developers for chestnut avenue site is supportive of the favourable demand supply dynamics in the mass market segment and we expect strong response for the other sites triggered from the state's reserved list. The current trend is reflective of the growing developer confidence in the sustainability of the recovery in the property market as they seek for means to replenish their mass and mid market inventory.

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Sno Name of Tenderer                                        Tender PriceTender Price
                                                                                 
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                                                             (S$m)      (S$psf ppr)
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   1Sunny Vista Developments Pte. Ltd. And Hong Realty             143.7         280
    (Private) Limited                                                            
----+--------------------------------------------------------+------------+------------
   2Far East Square Pte. Ltd.                                      129.1         252
----+--------------------------------------------------------+------------+------------
   3Sim Lian Land Pte Ltd                                          113.0         220
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   4First Changi Development Pte Ltd                                93.4         182
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   5Centurion Re Pte Ltd                                            91.9         179
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   6UIC Commodities Pte Ltd And Chappelis Pte Ltd                   90.0         175
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   7Ho Bee Developments Pte Ltd                                     87.8         171
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   8Teambuild Properties Pte Ltd                                    87.1         170
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   9Allgreen Properties Limited                                     87.0         170
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  10Hoi Hup Realty Pte Ltd And Sunway Developments Pte Ltd          86.6         169
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  11Boon Keng Development Pte Ltd                                   81.2         158
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  12JBE Development Pte Ltd                                         78.5         153
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  13Frasers Centrepoint Limited                                     77.0         150
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