Two adjacent bungalows in Margate Road off Meyer Road were sold for $38 million.
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The buyer is said to be a low-profile boutique property investor that plans to build a block of apartment units on the 24,002-sq-ft combined freehold site. The plot can yield a 24-storey project of up to 55 to 60 units with an average size of 850 sq ft.
This translates to a land price of $1,023 psf of potential gross area, including a $13.6 million development charge (DC). This was nearly close to $1,047 psf ppr, inclusive of DC, which was paid for neighbouring 10, Margate Road in 2007.
Soilbuild Group Holdings, which purchased the property, later combined it with the adjacent Margate Mansions to form a bigger plot, which is now being redeveloped to Meier Suites. The land cost for the entire plot is said to be around $987 psf ppr.
Several market watchers said that the $1,023-psf-ppr land price for the latest deal, which involves 6 and 8 Margate Road, is close to the $1,000 psf ppr that Chip Eng Seng paid for 16 freehold terrace houses in Fort Road.
However, the latest property deal is still subject to acquiring outline planning permission for a new development and approval from the authorities to buy some state land for amalgamation with the property.
The sale of 6 and 8 Margate Road was brokered by Cushman & Wakefield through an expression-of-interest exercise, which attracted more than five bids.
The bungalow at 6 Margate Road was sold by the Estate of Tan Lai Choon, while the 8 Margate Road was sold by Bian Guan Realty. The two properties were zoned for residential use with a plot ratio of 2.1.
According to some analysts, assuming that the new owners use the balcony allowance of the additional ten percent gross floor area, the unit land price will be lowered to $954 psf ppr. With this, the new breakeven cost for the project could be $1,500 psf.
Meanwhile, according to URA’s monthly developer sales stats, Soilbuild sold some units in its Meier Suites project, which comprises three- and four-room apartments in February and March at prices ranging from $1,200 psf to $1,549 psf.
In a separate transaction, a consortium, which includes Soilbuild, recently signed a deal to purchase a freehold site at 23 New Industrial Road, which houses an industrial building that is being planned to be redeveloped.