THE latest Government Land Sales (GLS) tenders for 2 99-year leasehold housing sites have drawn keen interest, reflecting developers’ hunger for land in the suburbs following strong sales last year.
It also reflects their confidence that the segment will continue to post healthy demand from first-time homebuyers and HDB upgraders.
The top bid for an executive condo (EC) housing site in Bukit Batok West Avenue 8 was S$661.67 per square foot per plot ratio (psf ppr), setting a new record price for EC land.
ECs are a public-private housing hybrid with initial buyer eligibility and resale conditions, which are completely lifted 10 years after the project has been completed.
The top bid, from a tie-up involving Qingjian Realty and Santarli Group, toppled the previous record for EC land price of S$658.93 psf ppr in July 2021 by the same consortium for an EC plot in Tampines Street 62.
The Bukit Batok land parcel, which is about 1 km from the Bukit Gombak MRT station, drew 9 bids at the tender closing on Tuesday (Mar 8, 2022).
The other site on offer, along Dairy Farm Walk and designated for private housing, drew 7 bids. The S$980.07 psf ppr top bid – by Sim Lian Land and Sim Lian Development – was just 1 per cent higher than the second highest bid of S$970 psf ppr from a tie-up between United Engineers’ unit UED Alpha and Soilbuild Group.
Located about 700 m from Hillview MRT station on the Downtown Line, the 168,600 sq ft plot can yield about 385 housing units.
The winning margin for the Bukit Batok site was 4.8 per cent.
Observers note that the top bidders for both plots are part of groups that have their own construction arms – which probably gave them an edge over developers without a construction arm. An air of uncertainty continues to linger about construction costs, which have risen significantly in the past couple of years amid supply-chain disruptions and a labour shortage.
Edmund Tie’s head of research and consulting, Lam Chern Woon, noted that the top 3 bids for the Dairy Farm site were within 3 per cent of each other. For the Bukit Batok EC plot, the top 3 bids were within 6 per cent of each other.
ERA Realty Network’s head of research and consultancy, Nicholas Mak, noted that the EC market is expected to be less affected by the mid-December 2021 cooling measures as practically all buyers of new EC units are either first-time homebuyers or HDB upgraders.
Qingjian Realty said the proposed scheme for the Bukit Batok EC site is a 15-storey project with 360 residential units.
PropNex Realty’s Wong Siew Ying projects the development’s average selling price at about S$1,300 psf and above.
JLL’s Ong Teck Hui, too, expects the selling price to be above current levels. Some 80 new EC units have been sold so far this year with prices averaging S$1,224 psf.
“A major factor contributing to the robust bidding for the subject site is the limited supply of new ECs on the market. Projects currently on the market are substantially sold, and there are only 3 EC projects in the launch pipeline,” he added.
As for the new private residential project that will arise on the Dairy Farm Walk plot, CBRE’s South-east Asia research head, Tricia Song, estimates the launch price could be S$1,800-1,900 psf. In the first 2 months of 2022, units at the neighbouring Dairy Farm Residences have sold at an average price of S$1,680 psf.
Summing up Tuesday’s tender results, Colliers Singapore’s research head, Catherine He, said: “The tenders closed with robust bids, reflecting still-strong developer interest for residential land in the suburbs, even post-cooling measures.”
CBRE’s Song noted that sentiment appears to have improved with more bids at the latest tenders, compared with the 4-8 bids received for the Lentor Hills Road and Jalan Tembusu private housing sites in January.