Published 9 March 2011
The Business Times
By Uma Shankari
A HDB site at Clementi Avenue 4 offered for sale under the design, build and sell scheme (DBSS) drew 11 bids at the close of the tender yesterday – the highest number of bids received since the scheme was introduced in 2006.
The top bid came from EL Development – the property development unit of construction company Evan Lim & Co – which offered $224 million or $271 per square foot per plot ratio (psf ppr).
If awarded the site, EL Development will build three blocks of 38-40 storeys each, said managing director Lim Yew Soon. There will be a mix of three-, four- and five-bedroom flats, but the bulk of units will be four-bedders. HDB estimates that 770 flats can be built on the plot.
‘It is quite rare for mature housing estates to have DBSS sites,’ said Mr Lim, explaining why his firm is keen on the site. ‘HDB flats in Clementi have always been very well sought after in the resale market. In addition, with new projects such as The Clementi Mall, Clementi looks set to be a very promising town.’
EL Development’s bid was just 3 per cent above the second-highest bid of $216.9 million or $263 psf ppr, which was jointly submitted by Centurion Re and Lian Beng Group.
The top bid was 35 per cent higher than the lowest bid, which came from Mezzo Development. Mezzo offered $166 million or $201 psf ppr.
Like Mr Lim, analysts attributed the strong interest for the site to its location. When the land parcel was launched in January, analysts expected a top bid in the range of $200-$250 psf ppr.
‘This site is one of the most attractive DBSS sites offered for sale this year,’ said Nicholas Mak, head of research at SLP International. ‘It is within walking distance to the Clementi MRT station and town centre.’
Based on the top bid of $271 psf ppr submitted by EL Development, the break-even cost of the new project on this site will be about $490-$530 psf, Mr Mak said. He estimates that the developer could launch four-room flats at the development at around $590,000, while five-room flats could go for around $720,000.
Flats sold under DBSS are offered to buyers under HDB’s eligibility conditions. But the developers who buy such sites have some flexibility in designing, pricing and selling the flats.
The land parcel has a maximum allowable gross floor area of 825,300 sq ft and carries a lease term of 103 years (including a four-year construction period).