Tenders closing for URA sale site at Marina Gardens Lane and HDB sale sites at Tampines Avenue 11 and Plantation Close (Executive Condominium or EC)
|Site for Tender
|Maximum Gross Floor Area
|Estimated number of housing units
|No of bidders
|Marina Gardens Lane
|$1,034,480,000 ($1,402 psf per plot ratio or ppr)
|Tampines Avenue 11
|$1,206,390,880 ($885 psf ppr)
|Plantation Close (EC)
Source: URA, HDB, JLL Research
Ms. Chia Siew Chuin, Head of Residential Research, Research & Consultancy at JLL
谢岫君, 私宅市场研究部主管 (新加坡) commented:
“In today’s tender closing of the abovementioned three sites, we saw keen interest in site acquisition in terms of tender participation, as developers’ inventory of unsold units is depleting and there is pressure to replenish their land banks, with some developers submitting bids for more than one site.
However, the top land bids are generally within expectations and reflects a cautious outlook among developers which could be attributed to several factors. Elevated interest rates, market cooling measures, high construction costs, standardisation of floor area definition which affects saleable floor area and developers’ profits, as well as macroeconomic uncertainties could be some considerations.
Marina Gardens Lane
The tender result for the site at Marina Gardens Lane is much awaited, given its prime downtown location and it marks the initiation of several other site tenders in the Marina South precinct.
The site attracted a contest between three consortiums and a single developer. The joint ventures of developers demonstrate a prudent strategy to pool resources and minimise risks for such a sizeable site acquisition. The number of tender participants shows that the site is well-received by developers but came as a surprise. This is in view of the large capital outlay required for the site as well as the recent April 2023 market cooling measures which are expected to have a greater impact on prime properties due to their higher exposure to foreign purchasers.
In terms of land price, the tender achieved a top bid of $1,402 psf per plot ratio (psf ppr), which is at the higher range of expectations. The differences in land bids between the top and the second and third highest bids are more 40% at 42.3% and 47.1%, respectively, and reflects the top bidder’s strong interest in the site. The second highest bid at $985 psf ppr and third highest bid at $953 psf ppr translate to just a 3.3% price gap and are generally below expectations, indicating the cautious stance among these contenders despite their interests in the site. The lowest bid at just $201 psf ppr by a sole developer Japura Development is opportunistic.
Although the successful tenderer will have a first-mover advantage in the transformative plans for the Marina South precinct, the area is undeveloped and the high development cost due to the land size and downtown location as well as development risks, could have tempered the confidence of other contenders.
Tampines Avenue 11
The commercial and residential site at Tampines Avenue 11 was contested by three parties, which is within expectations of two to four parties.
The site drew a top bid of $885 psf ppr, which is 13.9% above the next highest bid of $777 psf ppr and 32.7% above the lowest bid of $667 psf ppr. The top bid is at the lower range of expectations of $850 psf ppr to $950 psf ppr and the subsequent offers are below expectations. The results show that despite the attractiveness of the site, developers are careful in their bidding in view of the huge capital resource commitment as well as the uncertain economic environment.
The site is highly attractive to the bidders as the future mixed-use development will introduce more mass-market private homes to address housing demand in Tampines. The last private non-EC residential project launch in Tampines was the mega 2,203-unit Treasure at Tampines in March 2019 which was fully sold in February 2022. The site also offers developers the opportunity to expand suburban retail offerings in a neighbourhood that stands to benefit from enhanced retail presence, considering the growing residential population in Tampines.
The last sale of a commercial and residential site in the suburban mass market was the award of the 3.8-ha site at Pasir Ris Avenue Drive 3/Pasir Ris Avenue Drive 8/Pasir Ris Central for $700 million or $685 psf ppr in March 2019. Similarly, the mixed-use Pasir Ris Mall and Pasir Ris 8 are integrated with an underground linkway, a 4-storey podium comprising a bus interchange, HDB town plaza and a polyclinic.
Nine competing bids were submitted for the EC site at Plantation Close, reflecting strong competition for the site and a positive outlook for the EC market.
This is the second EC site released for sale in the future Tengah town, after the EC plot at Tengah Garden Walk (Copen Grand EC project) was sold for $400.318 million or $603 psf ppr to City Developments Limited and MCL Land in June 2021. The sell-out performance of Copen Grand and the low supply of EC units on the market have boosted the attractiveness of this site. There is also greater motivation to acquire this site before an adjacent EC plot is released for sale under the 2H 2023 GLS programme in November 2023.
The nine tender participants achieved for the site in today’s tender closing are higher that the four contenders attracted by the nearby Bukit Batok West Avenue 5 EC site in September 2022. Today’s tender participation level is similar to the nine parties seen for the Bukit Batok West Avenue 8 EC site tender in March 2022. This shows developers’ general positive outlook for the EC market.
It will be interesting to watch how the tenderers respond to HDB’s modified concept and price revenue tender system in adopting more innovative construction technologies and productive construction methods. Under this system, tenderers for this site have the option to submit an alternative bid on top of a base Prefabricated Prefinished Volumetric Construction (PPVC) bid. The alternative bid may be of a non-PPVC technology or a hybrid of technologies which could yield the specified productivity improvement. PPVC bids will automatically qualify for the tender evaluation, while any alternative bid will be required to submit a write-up to demonstrate the feasibility of proposal. The Concept Evaluation Committee, chaired by Building Control Authority, will assess whether the alternative bid(s) can reasonably fulfil the productivity improvement requirements before they can be considered as qualifying bids to proceed with the tender evaluation with the PPVC bids. From the nine tenderers today, two tenderers submitted an alternative proposal.
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