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Latest state tenders yield mixed bag of results

Latest state tenders yield mixed bag of results.

AN EXECUTIVE condominium (EC) housing plot along Canberra Link in Sembawang pulled in eight bids at a state tender on Wednesday, with the top bid coming in 1.4 % higher than that for an adjacent EC site sold last September. On the other hand, a private housing site along Clementi Avenue 1 drew more moderate interest, with only five bids. The top bid there was also below the expectations of at least one property consultant, Tricia Song of Colliers International.

Wednesday's provisional state tender results for the two 99-year leasehold sites reflect developers' greater confidence in the EC segment, given their relatively limited supply. In the private housing market on the other hand, a launch glut looms, following developers' land buying spree in 2017 and the first half of 2018, until this was reined in by the government's round of cooling measures last July.

UOL Group and United Industrial Corporation teamped up to place the top bid of S$491.3 million for the Clementi private housing site. This works out to S$788.31 per square foot per plot ratio (psf ppr). Some observers say that the top bid seems to have been benchmarked against a possible selling price of below S$1,400 psf.

JLL senior director Ong Teck Hui said: "The moderate interest for the site could be due to it being away from Clementi MRT station and the town centre, and the relatively high absolute land price - approaching half a billion dollars.

"Nevertheless, there should be demand for units in the development as pricing is likely to be near entry-level for private homes and therefore affordable for many buyers."

Liam Wee Sin, group chief executive of UOL Group, said the proposed scheme for the site is a 40-storey project comprising 640 units to capitalise on the extensive views. "We like this Clementi Avenue 1 site for the same attributes that contributed to the 100 % sell-out for our nearby development, The Clement Canopy," he said. The 505-unit Clement Canopy, released in February 2017, was sold out by July 2018.

"From our experience, we believe that there is very strong demand for this locale due to its close proximity to a strong educational cluster anchored by the National University of Singapore (NUS), NUS High School and Nan Hua High. "This site would attract not just homebuyers and upgraders, but also investors, given the catchment of potential tenants from nearby establishments including one-north, the Science Park and NUH (National University Hospital)," said Mr Liam.

The four other bidders for the site were:

For the Canberra Link EC site, the top bid, from MCC Land (Singapore), was S$233.89 million or S$566.05 psf ppr. This was just 0.17 % higher than the second highest bid of S$233.5 million or about S$565 psf ppr from a partnership between City Developments' unit CDL Constellation and TID Residential.

  • MCL Land's Vesta SG Residences (S$756 psf ppr);
  • Sing Holdings' unit Sing Properties, in partnership with MCC Land (S$726 psf ppr);
  • Coli (Singapore) in partnership with CSC Land Group (Singapore), which offered S$701 psf ppr for the site (CSC Land is a unit of China Construction (South Pacific) Development Co); and
  • CDL Constellation, Intrepid Investments and TID Residential, with a S$670 psf ppr bid.

The other six bidders were:

  • A tie-up between Hoi Hup Realty and Sunway Developments (S$540 psf ppr);
  • Sim Lian Land (S$528 psf ppr);
  • CNQC Realty (Treasure) Investment, in partnership with Evia USB Real Estate (S$489 psf ppr);
  • Sing Holdings' Sing Development, which teamed up with Wee Hur Development (S$477 psf ppr);
  • Master Contract Services (S$465 psf ppr); and
  • JBE Development (S$431 psf ppr).

Top bidder MCC Land's chief executive Tan Zhiyong said the group is planning a project of about 385 units for the site and highlighted the group's experience in the EC market in Singapore's north.

"Overall, the EC market holds considerable prospects in the next few years with a continued controlled supply and widening EC-private condominium price gap," he added.

Adapted From The Business Times, July 5 2019