SINGAPORE – Bidding remains muted for the latest two state land tenders in Margaret Drive in Queenstown and Jalan Loyang Besar in Pasir Ris, with developers more upbeat about the executive condominium (EC) market than the private residential segment, where new home sales have hit fresh multi-year lows.
Despite its location in the popular Queenstown area, the Margaret Drive site – the first Government Land Sales (GLS) private residential site in the estate since 2017 – drew just two bids, the Urban Redevelopment Authority said on Aug 1.
The top bid of $497 million, or $1,154 per sq ft per plot ratio (psf ppr), was submitted by a joint venture between Hong Leong Holdings and GuocoLand. It was about 5 per cent higher than Sing Holdings’ bid of $473.6 million, or $1,100 psf ppr.
In comparison, a Jalan Loyang Besar site that can yield 710 EC units drew four bids and a top bid of $557 million, or $729 psf ppr, from a consortium comprising Qingjian Realty, China Communications Construction and ZACD Group, said the Housing Board on Aug 1.
Developers appeared more willing to bet on an entry-level EC site in Pasir Ris targeting first-time buyers and HDB upgraders than a choice private condominium plot in a popular location with a sizeable HDB upgrader pool, Knight Frank research head Leonard Tay noted.
Setting a new record land rate for a GLS EC site, the $729 psf ppr bid topped a previous record bid of $721 psf ppr for a Tampines Street 62 (Parcel B) plot, which was awarded to Sim Lian Group in October 2023.
Even so, Ms Tricia Song, CBRE’s head of research for South-east Asia, noted that bidding for the Jalan Loyang Besar site “paled in comparison” with that for the Tampines Street 62 plot, which drew seven bids.
Nonetheless, the record land rate of $729 psf ppr reflects developers’ confidence in the EC market. It is less affected by the latest property cooling measures due to the higher proportion of owner-occupiers and first-time buyers, Ms Song said.
Although the number of bidders is the lowest recorded for an EC plot in the east since the tender in April 2011 for a Tampines Central 7 GLS site, the tender participation for the Jalan Loyang Besar plot is considered respectable given current headwinds, Ms Chia Siew Chuin, JLL’s head of residential research for Singapore, pointed out.
With ECs still seen as the most affordable option by HDB upgraders, and in view of the limited new supply, the EC market appears to be “a lower-risk proposition for developers, compared with the private residential market”, she said.
PropNex head of research and content Wong Siew Ying said the future launch will likely benefit from HDB upgraders and pent-up demand from first-time buyers. It has been more than a decade since an EC plot was rolled out in Pasir Ris.
The last EC site in Pasir Ris Drive 3/Pasir Ris Rise was sold in November 2012 at $331 psf ppr.
Ms Chia believes that demand for the Jalan Loyang Besar EC will be supported by HDB upgraders in Pasir Ris, Tampines and Simei. These estates have more than 91,000 four-room and larger HDB flats as at April, constituting about 82 per cent of the total flat count there, she noted.
As for the Margaret Drive site, Ms Song believes that the project will be supported by HDB upgraders in the vicinity. This is in view of the median price of four-room flats in Queenstown hitting $897,500 in the first quarter of 2024, and reports of a record sale of a five-room flat in Margaret Drive at $1.73 million.
Ms Chia noted that the high resale HDB prices in Queenstown suggest a higher affordability threshold and more robust upgrading demand. As at April, there were more than 15,000 four-room and larger flats, or about 46 per cent of the total flat count, there.
Despite the site’s favourable attributes, including its proximity to amenities and Queenstown MRT station, OrangeTee & Tie chief executive Justin Quek said developers have to contend with demand, affordability and higher costs. There is also a need to build an early childhood development centre, which would make the site more complex to develop.
The last GLS tender in the area was a Stirling Road site. It drew 13 bidders and was sold to Hong Kong’s Logan Property Holdings and China’s Nanshan Group at $1,051 psf ppr in May 2017.
“Source:[Developers more upbeat about Pasir Ris EC site than Margaret Drive private condo plot] © Singapore Press Holdings Limited. Permission required for reproduction”
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