CDL's Echelon more than 60% sold over the weekend

OCBC estimated Echelon's gross profit margin at 40%.

OCBC Investment Research visited City Development’s (CDL) latest launch, the 508-unit condominium project Echelon, over the weekend.

The project near the Redhill MRT station, it said, put up a strong set of numbers in its first weekend of sales, with over 300 units sold at ASP of around S$1.7k psf.

"We believe this launch performance to be above view. The breakdown of units in the project are as follows: 68 one-br units, 152 two-br, 246
three-br, 38 4 br and 4 penthouses. We note that the bulk of the one- br and two-br units have been sold."

May Bank KimEng said that Echelon's ASP of SGD1,700 psf was 13% higher than its assumption of SGD1,500 psf, which is close to the median transacted price at Ascentia Sky next door over the past 12 months.

OCBC notes that strong buying interests are attributed to attractive mortgage packages offered by banks

Both DBS and UOB were offering attractive mortgage loan packages for buyers at the showflat: 0.85% + 3M SIBOR for the first three years, 1.00% + 3M SIBOR for the fourth year, and 1.25% + 3M SIBOR for the fifth and after. OCBC was offering a mortgage package based off its board rate; at its current board rate of 4.5%, this translates to mortage rates of 1.08% in the first year, and 1.18%, 1.38%, 2.65% and 3.75% in the second, third, fourth and fifth years, respectively.

OCBC estimates that  breakeven ASP for the project at $1.2k psf, which translates to an attractive gross profit margin around 40% for the development.

To recap, CDL together with Hong Realty put in the top bid (S$396m or S$754 psf GFA) for the 99-year GLS site at Alexandra Rd five minutes away from the Redhill MRT station in Nov 2011. There were seven bidders in all and CDL’s bid came in 9% above the next highest.