Land-hungry developers hit Singapore's en-bloc market

A consortium paid a whopping $575m for Rio Casa.

A privatised HUDC estate, Rio Casa, has been sold at a record price that is 27% higher that reported asking price. This implies that developers could be expecting home prices to rebound when the project is launched, sometime in late 2018.

Rio Casa has a site area of 36,811.1 square metres, with a potential built-up plot ratio of 2.8x. This was way above the $450m that the owners were reportedly asking for. Based on estimates, each of the 286 Rio Casa owners will receive close to S$2m if the en-bloc deal goes through.

According to DBS, Oxley-Lian Beng Venture Pte Ltd put in a robust $575m bid that was accepted by the owners of the Property. The estate is located in an established residential estate and is approximately 800 metres from Hougang MRT station.

Most interestingly, the site is located close to Paya Lebar Airbase, which will be moved to Changi in the longer term, as announced during the National Day Rally 2013, making way for the potential redevelopment of the site at Paya Lebar. Thereafter, further land intensification from the current 2.8x could be possible when that happens

"We estimate the breakeven for the land to be close to $1,100psf. The developer will have to pay a differential premium of $208m for the top-up of the lease and the development of the site to a gross plot ratio of 2.8x. This translates to an all-in land price of close to $706 psf," DBS said.