Tender closing for Executive Condominium site at Tampines Ave 10 & residential site at Kampong Java Road
Mr Ong Teck Hui, Senior Director, Research & Consultancy
Tender closed today for two GLS residential sites.
1. EC site at Tampines Avenue 10 - Firm bidding underpinned by favourable fundamentals
The Executive Condominium (EC) site at Tampines Avenue 10 has a GFA of 69,815 sqm and a development cap of 700 units.
Seven bids were received with the top bid of $434,450,000 ($578 psf/pr) submitted by Hoi Hup Realty Pte Ltd and Sunway Developments Pte Ltd. The top bid and the number of bidders were within expectations. The top bid at $578 psf/pr is in line with the winning bids in recent EC tenders such as:
- Sumang Walk at $583 psf/pr in February 2018
- Canberra Link at $558 psf/pr in September 2018
- Anchorvale Crescent at $576 psf/pr in September 2018
It is noted that the top bid of $578 psf/pr for this EC site exceeds the $565 psf/pr for the private residential site on which The Tapestry is being developed. The Tapestry site is 200m away on the same road and was awarded in April 2017.
Optimism in the EC market is underpinned by favourable fundamentals – units for sale in new EC projects has practically been exhausted so there is no new supply on the market until the Sumang Walk project is launched. Meanwhile, demand for new ECs remain strong with buyers eagerly waiting for the next launch. The lack of supply of new ECs has resulted in the median prices of new ECs shooting up from $793 psf in 4Q17 to $989 psf in 4Q18, a 24.7 per cent increase. Future supply of new ECs is also limited – besides Sumang Walk, Canberra Link and Anchorvale Crescent are also in the pipeline.
2. Residential site at Kampong Java Road - Cautious biddings due to significant supply in prime district
The residential site at Kampong Java Road has a GFA of 32,602 sqm.
There were seven bidders in the tender with the top bid of $418,380,000 ($1,192 psf/pr) submitted by CELH Development Pte Ltd. In the vicinity, several collective sale sites had been sold, although these were before the July cooling measures:
- Makeway View at $1,626 psf/pr in March 2018 (Freehold)
- Dunearn Gardens at $1,914 psf/pr in April 2018 (Freehold)
- Chancery Court at $1,610 psf/pr in May 2018 (99 years)
Other factors aside, the wide gap between the top bid of the subject site and the abovementioned sites sold earlier suggests that residential land prices in that area has softened. Due to the buoyant land sales in 2017 and 1H18 including the prime districts, the coming supply of units for sale is significant. This has led to cautious bids in today’s tender which are below expectations. There may be uncertainty as to whether the top bid of $1,192 psf/pr meets the URA’s reserve price. However, it reflects current market sentiments as it takes into account the unfavourable supply and demand conditions affecting the market.
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