Forestwood Residences Launch . Land Sale Pricing
A consortium of Verwood Holdings, Intrepid Investments & TID Residential won the URA (Urban Redevelopment Authority) land sale for the Forestwood launch site with a bid price of $321 million. This works out to $7,641.95 per sq m, or $710 per sq ft (psf) of gross floor area for the land itself.
Another JV, of Singland Homes & UOL Venture Investments, came in 2nd with a $312,880,000 bid, just 2.6% lower. In 3rd place was a Frasers Centrepoint venture, FCL Topaz & Sekisui House, at $311,109,800, barely 0.5% below the 2nd placer.
The closeness of the top 3 bids seems to indicate a consensus as to the value of this site. It is a good sign, as buyers will not end up paying a premium, but rather what is fair value in today’s market.
URA announced the results of the tender on 5 November 2015. A total of 11 developers put in bids for this 99-year leasehold site.
The high number of bidders shows there is healthy demand from developers, said Mr Nicholas Mak, executive director of Research & Consultancy at SLP International Property Consultants.
“One possible reason for the relatively high number of bids is the attractive location of this site in the North-East region. It is close to Serangoon MRT Station, which is an interchange station, and NEX, a regional shopping mall,” he said.
“Furthermore, developers may want to replenish their land banks given the subdued markets, and the absolute price quantum of this site might be within the range of quite a few large-sized developers & consortiums,” he added.
Forestwood Residences Launch · Pricing Analysis
Verwood Holdings (CDL subsidiary), and Intrepid Investments & TID Residential (subsidiaries of Hong Leong)’s winning bid for the Forestwood launch site can likely be traced to its confidence in the District 19 property market.
Mr Ku Swee Yong, chief executive of property firm Century 21, said that CDL & UOL know the location and its market dynamics well. Both have recently successfully launched, and are close to selling out projects in the Bartley area just one MRT station away, and have a finger on the pulse of demand here.
Assuming construction and overhead costs of about $400 PSF, Mr Mak estimated the break-even cost for the Forestwood Residences launch to be roughly $1,110 to $1,150 PSF.
This could possibly work out to a selling price of anywhere from $1,350 to $1,450 PSF, depending on the unit size and facing.
Note: As in all condo pricing, the average price usually pertains to the mid-size units, like 3 and 4 bedders. Smaller units are typically priced above the average PSF for a project. For example, one bedders would be priced at least 12% to 20% above that.
Forestwood Residences Launch · Market Analysis
“In the event we are awarded the site, CDL will explore a condominium development of between 12 & 13 storeys with over 500 units. Apartments on higher floors will enjoy good views across the landed housing enclave,” CDL said after the provisional tender results.
For a comparative market analysis of nearby projects, here are the most recently launched developments in the vicinity and their average pricing:
1) Stars at Kovan . Average $1,417 PSF . At Kovan MRT slightly further from town
2) GEM Residences . Average $1,426 PSF . At Braddell MRT station
3) Poiz Residences . Average $1,425 PSF . At Potong Pasir MRT station
UOL launched Botanique @ Bartley MRT about 2 years ago and have almost sold out the project at around $1,300 PSF. However it is in a less desirable location, as unlike the above projects it is not within walking distance of a fair size shopping centre.
See this link for the news report for the tender results (opens in new window).
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Latest Update: Forest Woods is sold out. Thank you for your interest.