SINGAPORE (Oct 9): OCBC Investment Research is maintaining its “buy” call on City Developments Limited (CDL) while raising its fair value estimate to $12.90 from $12.39 previously after factoring in its recent site acquisition as well as firmer residential average selling price (ASP) assumptions.

This comes after the group last week announced it had successfully tendered for the collective sale of Amber Park via its 80%-owned joint venture (JV) with Hong Leong.

In a Thursday report, lead analyst Eli Lee says he expects the development’s sale price to range between $2,300 to $2,400 psf when launched.

The collective sale price of $907.7 million for the 200-unit development at Amber Garden translates to a price of $1,515 per sq ft per plot ratio, which the analyst believes to be a reasonable price given the current competitive land market.

Lee also highlights the site’s strategic location in the Katong and East Coast area, which makes it accessible via the East Coast Parkway and within a 1-2km distance to a number of primary and secondary schools.

He further notes that the new Tanjong Katong MRT station, when it is completed in 2023, will be located approximately 200 metres from the site.

“Subject to approval, the JV plans to redevelop the site into a condominium project comprising four 25-storey blocks with close to 800 units and a basement carpark. Most apartments will have a North-South orientation with many units commanding sea views,” says Lee.

“We note that CDL was also the original developer of Amber Park three decades ago, and management has indicated that they are intimately familiar with the location,” adds the analyst.

This article, written by Michelle Zhu, first appeared in The Edge Singapore.