Real Estate and Property Market Update – Week 52

Bidding on New Alexandra Road Site Tops $288 million – 28th December 2007

Bullish bidding for a new 92,000 square foot residential site on
Alexandra Road saw six bids with the highest reaching $288 million – 31
per cent above the reserve price. The tender closed yesterday with a
joint bid by United Engineers and Wing Tai Holdings taking poll
position. The second spot was taken by the computer-parts manufacturer,
Lafe Technology with a bid of $602 per square foot which was 6 per cent
less than the winning $639 per square foot. The lowest bid came from
GuocoLand with $501 per square foot. Other bidders included Frasers
Centrepoint and Hong Leong Group.

It is estimated that to
break even, the Wing Tai/United Engineers consortium will need to sell
units above $1,000 per square foot. Sub sales of units in The
Metropolitan adjacent from the site are currently selling at $900 to
$1,100 per square foot.

The new site has a gross floor area
of 451,000 square foot which could yield as many as 400 condo units.
And demand is expected to be strong due to proximity to Redhill MRT (5
minutes walk) and likely “HDB upgraders” from the nearby Queenstown and
Bukit Merah sites which have seen recent HDB sales up to $719,000.