Condo site at Tanah Merah Kechil Road drew strong interest

A consortium formed by Fragrance Group and World Class Land  topped 12 other contenders at $285 million or $676 per sq ft per plot ratio.

The tender for the condominium site at Tanah Merah Kechil Road drew strong interest with 13 contenders, reflecting developers’ continued optimism towards the private residential market, particularly the mass-market segment. The top bid submitted by a consortium formed by Fragrance Group Limited and World Class Land Pte Ltd at $285 million or $676 per sq ft per plot ratio outbid the second highest bid by a mere 1.8%.

According to Chia Siew Chuin  Director of Research & Advisory of Colliers International, the enthusiastic responses are likely to be spurred by the brisk sales data of recent suburban condominium launches as well as the excellent location of the site which is next to the Tanah Merah MRT station.

"As the site is situated close to the predominantly landed residential area of Bedok Road, Simpang Bedok and Lucky Heights estate, there could be sizeable portion of potential downgraders from these landed properties. There is the possibility of retiree couples who decide to sell off their landed homes to settle in a smaller high rise unit with condominium facilities as their children have grown up," she said.

"According to the Population Census 2010, the Bedok Planning Area (where the subject site is located in) has the highest number of households residing in landed properties. There would also be a potential pool of upgraders to tap upon. Currently, a significant 14,003 households stay in five-room and executive HDB flats in the Bedok Planning Area, according to the Census," she added.

Colliers International noted that based on a land cost at $676 per sq ft ppr, the breakeven cost is likely to range from $1,000 - $1,100 per sq ft and an envisaged selling price of above $1,250 per sq ft.

From January to June this year, units at the nearby Optima@Tanah Merah were sold at a median price of $1,114 per sq ft.