Tenders closing for two URA sale sites

SINGAPORE, August 1, 2024 – Tender closed today for two Government Land Sales (GLS) sites at Margaret Drive and Jalan Loyang Besar (EC).

^{* A minimum 500 sqm GFA for childcare centre.
Source: URA, JLL Research}

谢岫君, 私宅市场研究部主管 (新加坡) commented:

Tender participation for the site is subdued with just two contenders and the top bid of $1,154 psf ppr also comes in at the lower range of expectations. The tender outcome reflects developers’ cautious stance towards land acquisition despite the attractive attributes of the site.

The site has a city-fringe location that is near to host of amenities and within a short walk to the Queenstown MRT station.

This is the first private residential site tender in the area since 2017. The last GLS tender for the Stirling Road site, which has been developed into Stirling Residences, drew 13 bidders and was sold to Hong Kong’s Logan Property Holdings and China’s Nanshan Group at a record price of $1,051 per sq ft ppr for the area in May 2017.

The absence of new private residential projects in the immediate neighbourhood opens an opportunity for the consortium to build a new condominium to tap on demand from a potential pool of resale flat upgraders in the Queenstown housing estate. The high resale prices of public flats in the surrounding area suggest a higher affordability threshold and more robust upgrading demand to private homes in the locale. As of April 2024, there were more than 15,000 units of 4-room and larger HDB flats or about 46% of the total HDB flats in the Queenstown estate.

At a land cost of $1,154 psf ppr, launch price of residential units on the subject site could start from $2,500 psf and the breakeven cost is estimated at about $2,200 - $2,400 psf, depending on technical, material and design considerations.

The Jalan Loyang Besar EC site attracted four bidders and a top bid of $729 psf ppr. Although the number of contenders is the lowest recorded for an EC site in the east region since the tender for the Tampines Central 7 site (now The Tampines Trilliant) in April 2011, the tender participation is considered respectable given current headwinds.

The top bid of $729 psf ppr also surpasses the previous record bid price of $721 psf ppr set by Sim Lian Land Pte Ltd and Sim Lian Development Pte Ltd for an EC site when it won the Tampines Street 62 (Parcel B) plot in July 2023.

The participation level and optimistic top bid reflect a positive outlook on the demand for ECs and their prices. This stems from their position as the most affordable option for those seeking to upgrade from public housing and their limited supply. This makes the EC market a lower-risk proposition for developers compared to the private homes market, offering more predictability in investment outcomes.

The demand for ECs in Pasir Ris is projected to be strong, bolstered by the residential households residing in public housing flats within the surrounding Pasir Ris, Tampines, and Simei HDB estates. In these estates, there were over 91,000 units of 4-room and larger HDB flats as of April 2024, constituting about 82% of the total flat count there.

Notably, there is a lack of new EC supply in Pasir Ris. The last EC site at Pasir Ris Drive 3/Pasir Ris Rise was sold in November 2012 for $331 psf ppr. It has been developed into Sea Horizon, which is the last EC project launched in Pasir Ris in 2013.

Elsewhere in the east region, Tenet EC which was launched in December 2022, sold 72% of the total 618 units at launch and is currently 99% sold. The next upcoming EC launch in the east is the new 760-unit Aurelle of Tampines EC project to be built on Tampines St 62 (Parcel B) by Sim Lian Land Pte Ltd and Sim Lian Development Pte Ltd. About 560 units of EC units will also be added when the site at Tampines Street 95 is launched for tender under the 2H24 GLS Confirmed List in August.