Aggressive bidding seen for prime sites within the Orchard Road area.
DBS Group Research expects home prices in Orchard Road to reach or even surpass the $4,000 psf mark, given the aggressive bidding for prime sites within the area, reported Singapore Business Review.
Hong Kong-listed Shun Tak Holdings, for instance, acquired two prime sites in Orchard Road – 14 & 14A Nassim Road and 21 Orchard Boulevard (Park House) – for a total of $593.5 million.
“These are bold bids placed by Shun Tak as the bid prices imply that selling prices will test new highs in the Orchard vicinity,” noted DBS analyst Derek Tan.
DBS estimates showed that breakeven levels for 14 & 14A Nassim Road and Park House stand at $3,100 psf and $3,300 psf respectively, after assuming a 10 percent bonus balcony space. This implies that projects in the pipeline may hit or even breach the $4,000 psf mark.
“We note with over 20 sites sold within the Core Central Region (CCR) year to date, supply in the CCR for new developments is building up in the near term and competition for buyers’ attention is also heating up,” said Tan.
With nearly the whole stretch of Cuscaden Road up for sale including YTL’s 3 Orchard by the Park as well as a Government Land Sales site won by SC Global, New World Development and Far East Consortium, it won’t be a surprise if new records in property prices are set in the coming months.
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