FNN

FNN: Group emerged as the top bidder for Fernvale Close in a 40:30:30 JV with Far East Organization and Sekisui House with a bid of $257m (equiv to $533 psf gfa), and 3% above the next highest bidder MCC Land. The residential site at Fernvale Close has gfa of 482,131 sf, and is estimated to yield c.490 units. Interest in the well located site was strong, with 9 bidders taking part, with the winning bid coming in above the top range of market expectations of $500-520 psf ppr, mainly due to the proximity to the Layar LRT station and several amenities. The adjacent EC site was acquired by City Dev in Nov 2012 at $296 psf. DB estimates a breakeven of $907 psf. Assuming an ASP of $1050; this would imply a margin of 14% and c.1.3¢ accretion to its RNAV. As a comparison, City Development’s Jewel@Buangkok, located 1 MRT stop away recently launched at an ASP of $1150 psf, while H2O Residences (launched in 1Q11), located beside the site last transacted at c.$993 psf in April. La Fiesta, located closer to the Sengkang MRT was launched at c.$1175 psf. DB maintains its HOLD rating with TP of $9.83, due to an unclear strategic direction and free float restoration in the counter as an overhang.