Business Times

Chinese firm makes top bid of S$483m for HDB site

Business Times
Business Times

A PRC developer, HY Realty, has put up the top bid for a residential site near the Queenstown MRT last week (23 Jun) at a price of $483.2 million. This was 8 per cent higher than second bid.

The land belongs to HDB. HDB disclosed that the 10,516.1 sqm, 99-year leasehold site at Dundee Road attracted a total of nine bids.

At $483.2 million for the site, which is well above the market expectations, it works out to around $871 per sq ft per plot ratio. The site can yield around 645 private residential units.

HDB said a decision on the award of the tender for the Dundee Road site will be made at a later date after the bids have been evaluated.

JLL head of research and consultancy Chua Yang Liang estimated that the PRC developer could be looking at a selling price of between $1,550 psf and $1,600 psf, assuming a construction cost of between $320 psf and $360 psf.

A spokesman for HY Realty said it is not a unit of Chinese developer Hao Yuan as was reported, but it has the same shareholders as Singapore-based Hao Yuan Investment, which is controlled by mainland shareholders.

He said HY Realty has plans to build a 700-unit condominium on the site, expected to be launched in the first quarter of next year.

“We are confident of this site as city-fringe homes are always in high demand because of the close proximity to the city centre.”

Meanwhile, National Development Minister Khaw Boon Wan in a radio interview last week (23 Jun) said that the new income ceilings for HDB flat applications are likely to be made known in August.

This came after Singaporeans started complaining that even those whose household income is more than $10,000 can’t afford to buy private homes anymore. They are asking the government to increase the income ceiling requirements so that they can buy HDB or EC flats.

Currently, households earning a gross income of more than $10,000 cannot apply for new HDB flats, while those earning more than $12,000 cannot buy ECs.

The income ceiling was last raised in 2011, from $8,000 to $10,000 for HDB flats and from $10,000 to $12,000 for ECs.

It is quite understandable why even some well-to-do households are asking the government these days to raise the income ceilings so that they can also buy HDB flats or ECs.

Take for example, if HDB finally awards the sale of the Queenstown site to the PRC developer, HY Realty, and it eventually sells a 1000 sqf 99-year unit at $1.6 million, with a household income of $12,000, the affordability ratio (price over annual income) works out to be 11.1. This is more than 2 times of the recommended safe limit of 5 by international bodies.

Under the new PAP leadership, it seems that the 5Cs are now increasingly out of reach by most Singaporeans.

What do you think?

This article was first published on TR Emeritus: “PRC firm puts up top bid of $483 million for HDB site“.