A LAND parcel at Tanah Merah Kechil Link, slated for residential with commercial use on the first storey, is now up for sale by public tender.
The Urban Redevelopment Authority (URA) launched the tender on Thursday, under the confirmed list of the first half 2020 government land sales (GLS) programme.
The site can potentially yield about 265 residential units and has a lease period of 99 years. It has a site area of 8,880 square metres (sq m) and a maximum gross floor area (GFA) of 24,864 sq m.
The maximum building height is 49 metres to 55 metres above the mean sea level. This translates to about 13 to 16 floors, depending on the design of the building, Nicholas Mak, head of research and consultancy at ERA Realty, told The Business Times on Thursday.
The land parcel can be developed into an estimated 265 dwelling units, which is fewer than the 310 units initially estimated when the site was first announced in December 2019, Mr Mak said.
“The site could also yield 2,000 sq m of commercial space that could be developed into strata-titled retail units or offices. Due to its proximity to the MRT station that is surrounded by condominium developments, it is very likely that the commercial space will be used as shops, and food and beverage outlets,” he added.
Wong Xian Yang, Cushman & Wakefield’s associate director of research for Singapore and South-east Asia said: “Despite dim economic conditions, the Tanah Merah Kechil Link site could potentially see healthy demand from developers, given its strong locational attributes and affordable quantum.”
He said the site is situated in a strategic location and enjoys good accessibility to the Tanah Merah MRT station, as well as numerous nearby amenities such as schools, a sports hall and retail malls like Bedok Mall and Changi City Point.
“It is also located near Changi Business Park, the Singapore Expo and Singapore Changi Airport. The site has a small commercial component at only 2,000 sq m, of which a minimum of 1,000 sqm will need to be used for a supermarket,” said Mr Wong.
Similarly, Mr Mak said the development’s convenient location would attract buyers’ attention and “have the potential to command attractive prices”.
“Compared to all the residential sites in both the H1 2020 GLS programme confirmed list and reserve list, the land parcel at Tanah Merah Kechil has the smallest GFA, which would require less capital requirement and hence, less financial risk to develop,” Mr Mak said.
According to Mr Mak, the residential development at Tanah Merah Kechil Link is likely to be launched between late 2021 and the first half of 2022.
“By then, the impact of the Covid-19 outbreak would have weakened and Singapore’s economic recovery should be underway. Hence, this project will be one of the more popular developments among new launch projects,” he said.
All things considered, Mr Mak is of the view that the tender for this site could attract five to 10 bids from major developers, with the top bid ranging from S$840 to S$888 per square foot per plot ratio (psf ppr), or between S$238 million and S$255 million.
Lee Sze Teck, Huttons Asia’s director for research, said the last site sold in the area was in 2016 and is being developed into Grandeur Park Residences, which is almost sold out.
“There should be a healthy amount of interest and the top bids could be in the range of S$780 to S$830 psf ppr,” he said.
Cushman & Wakefield’s Mr Wong said that the winning bid could be range bound between S$820 to S$870 psf ppr.
“Despite the site’s strategic location, developers are expected to bid cautiously due to higher construction costs and a severe economic recession as a result of Covid-19. It may also face potential competition from Treasure At Tampines, which is currently about 50 per cent sold and has 1,094 unsold units as of April 2020,” he said.
In view of the Covid-19 outbreak, the URA said it is offering a longer tender period of five months for this site, to provide developers with additional time to make their assessment.
The tender for the Tanah Merah Kechil Link site will close at 12 pm on Oct 29. The tender closing will be batched with an executive condominium site at Yishun Avenue 9, launched in April this year.