Residential site at Jalan Tembusu received 2 bids while 7 bidders vied EC plot in Tampines
Singapore : Demand for 2 land site tenders with contrary results on 18 July. A private residential land site at Jalan Tembusu; off Haig Road and Tanjong Katong Road. The plot can yield an estimate of 840 units. Effectively achieved 2 bidders. While 7 bidders vying for the executive condo site in Tampines.
The stark difference in this 2 plots was attributed to the difference in supply dynamic in this 2 regions. In contrast, the executive condominiums (a subsidised private condo hybrid are less affected by the property cooling measures)
Sim Lian Land and Sim Lian Development won the plot on Jalan Tembusu at the price of $828.8million or about $1069 per square foot per plot ratio. This was just $800,000 more than the only other bid by joint ventures City Development Limited and Frasers property.
0.1% gap lowest in recent years
Head of research and consulting at Edmund Tie, Lam Chern Woon noted that the 0.1% gap between the 2 bidders was the lowest he has seen in recent years. He added that the winning bid is about 18percent lower than the bid by CDL for the construction of the project Tembusu Grand. CDL bought the plot in the January 2022 government land tender.
Lam also added that this is also 21 per cent lower than the $1350.50 per square foot per plot ratio for the Grand Dunman condominium land developed by Sing Haiyi. Sing Haiyi won the land tender in the June 2022 government land sales.
CBRE’s head of research for South East Asia, Tricia Song noted that the 2 bids were a big contrast from the 8 bids from the neighbouring plot at the January 2022 land tender.
Developers wary about the supply in the vicinity
Wong Siew Ying of Propnex Realty said that “developers could be wary of the supply of new private condominiums in the area. Some potentially giving a miss at the July bid due to concerns of over saturation in the locale, even with the fact that district 15’s popularity among buyers.
Between April and July 2023, there were 3 projects being launched for sale in District 15. Tembusu Grand having 638 units, The Continuum with 816 units and Grand Dunman being a mega site having a total of 1008 units. The total number of new homes brings to a total of 2462 units.
“These launches have seen healthy sales, however collectively, there are still about 1300 units of unsold units at the 3 projects,” Wong acknowledged.
Edmund Tie’s Lam said the market changes have intensified in the past year. Buyer’s Stamp Duty(BSD) and Additional Buyer’s Stamp Duty(ABSD) as well as increasing financing cost will continue to weigh on the the home buying affordability.
Rising construction cost
“The rising construction cost coupled with lower effective saleable area as a result of gross floor area definition changes will threaten the overall profitability if a winning bid is too aggressive,” Lam said.
He added , “Perhaps the topmost factor in the consideration of developers is that the overall home price trajectory appears more fluid. With multiple moving parts a conservative price appears to be the logical and prudent approach so the to ensure sufficient pricing manoeuvre.in the midst of competition to achieve a sell out project and also to qualify for the ABSD remission on residential land purchase.”
Healthy turn out for the Executive Condo site
7 developers who vied for the plot at Tampines Street 62 EC site included CDL, China Construction and 4 other consortiums such as Forsea Residences and Qingjian Realty with Santarli Realty, joint ventures by Fraser and MCL Land, Hoi Hup Sunway. As well as TID Residential, Apricot Capital and SLB Development. Sim Lian Land and Sim Lian Development were the remaining consortiums to bid for the site.
The 4 consortiums chose to submit an alternative proposal. Besides a base prefrabicated, pre finished volumetric construction (PPVC) bid.
Pre finished volumetric construction uses large modules complete with finishes are manufacture in warehouses and assembled on site. The alternative bid could use non PPVC method or a hybrid of technology to potentially enhance the construction productivity.
The tender for the Tampines Street 62 site was conducted by Housing development Board (HDB). The bids received for the site will be assessed under a modified concept and results will for the tender will be published at a later date.
The location of the new EC site is next to Tenet EC. It will be near to the future Tampines North MRT station on the cross island line. The plot size can yield about 700 new homes.
Price gap between new condo and EC remain significant
Executive condos will remain to be attractive for their affordability to buyers who are eligible. The increase in ABSD rates in April 2023 makes it appealing to upgraders as they do not have to pay ABSD upfront even if they keep their flats until the new EC is completed.
Tampines Street 62 (Parcel B) is close to Tampined Avenue 11 GLS plot which was awarded recently. The site is expected to be an integrated development with a bus interchange, community centre and hawker centre and also a connection to the the upcoming Tampines North MRT station.
This could be an attractive incentive for the future EC buyers as it will offer greater convenience and improve transport connectivity.
