Wednesday, October 10, 2007

New Lease of Life II

The Straits Times
10 October 2007
Joyce TeoA SMALL firm, Katong Hostel, has emerged as the top bidder in a tender to find a managing agent to lease out 120 HDB flats.

The flats - likely to be let to international students and expats - have been vacated ahead of redevelopment under a pilot HDB scheme.

They will be leased out for three years with an option for three more years.
The 60 three-room flats and 60 four-room flats are in Blocks 1, 3, 5, 7 and 9 in Tiong Bahru Road.

The residents have moved to new flats under HDB's Selective En-bloc Redevelopment Scheme which is designed to add new flats to meet demand.

Katong Hostel's bid of $230,280 a month is 22 per cent above the next bid of $188,000, the provisional tender results released by the HDB yesterday showed.

That price is the sum the agent proposes to pay HDB to lease the flats - to be leased in turn to tenants.

Katong Hostel, which provides international student housing, is part of the Vita Group of hostels.

The tender, which attracted 15 widely varying bids from small firms and individuals, comes amid growing demand to lease HDB flats in a rising market.

The lowest bid came in at a mere $600 a month.

HDB has said that it will decide whether to expand the scheme, based on the tender response, as it has a potential supply of 4,000 to 5,000 flats which could boost supply in the next three years.


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1 comment:

SGalf said...

I think this tender exercise will further push up the rental prices in this area instead of doing the opposite. It will definately create a new equilibrium at about $3k per month.

Consider this: Katong Hostel has to breakeven at $1919 per unit based on their bid price. And I have not taken into other cost involved in refurbishing the place up plus some margin for profits.

If you are a landlord, hooray for you. If you are the tenant, better get a place fast! Or better still, own your own home.