Katong Plaza and Fortune Park extend tenders amidst property curbs

Developers want more time to study their bids.

The tender closing for Katong Plaza and Fortune Park have been extended due to the property cooling measures, Huttons Asia revealed.

Huttons Asia deputy head of investment sales Angela Lim believes that the commercial sector relatively looks more appealing to developers and investors as it is untouched by the Additional Buyer’s Stamp Duty (ABSD) which mainly took its toll on residential properties.

“Furthermore, foreigners and overseas investors would not be subject to ABSD on commercial properties, and the Loan-To-Value limits also remain unchanged,” Lim explained.

According to her, developers said that they would prefer more time to study their bids before acquiring more land.

“This would allow them to factor in the new property cooling measures, as well as the new Development Charge (DC) rates which would be announced on 1 September 2018,” Lim noted.

Katong Plaza is zoned as a mixed-used site under the URA Master Plan. Close to 90% of owners have agreed to its collective sale, with an asking price of $188m or about $1,969 psf ppr.

Lim thinks that having a mixed-use site could diversify risks for developers.

“The developer could choose to retain a portion of the commercial space for an anchor tenant whilst selling the remaining strata commercial units to retail investors,” Lim explained.

In addition, Lim believes that there is also a "very low risk" for the residential portion of the new development, as it can yield approximately 80 units based on an average unit size of 70 sqm.

She thinks that the site also has potential to be transformed with lifestyle cafes and shops as it has a 150m frontage along Brooke Road, Lim said. Aside from this, it is also located within schools such as Tao Nan School, Haig’s Girls’ School, CHIJ (Katong) Primary, and Tanjong Katong Primary School could also lure families who wish to have a convenient lifestyle within the Katong Area.

“Freehold sites within choice locations at the right pricing will continue to attract interest from investors and developers,” she said.

Meanwhile, Fortune Park located Kovan estate can yield about 100 to 120 units.

“There is limited supply in the area judging from the popularity of Stars of Kovan (395 units fully sold), Trilive (222 units fully sold), The Tembusu (337 units fully sold),” Lim explained.

Katong Plaza’s tender will be extended until 11 September whilst Fortune Park’s tender will close on 14 September.