Experts attributed the strong interest received to the Tanah Merah Kechil Link site’s proximity to the MRT Station and its palatable land size, while the interest for the EC site at Yishun Ave 9 was ‘unsurprising’ as the last two EC sites were sold in 2014.
Despite the weak economic outlook, the tenders for two Confirmed List Government Land Sale (GLS) sites received robust interest, with the top bids submitted exceeding analysts’ expectations. The tenders for both sites closed on Thursday (30 October).
The residential with commercial at first storey site at Tanah Merah Kechil Link attracted 15 bids, with MCC Land submitting the top bid of nearly $249 million or $930.33 per sq ft per plot ratio (psf ppr).
“This is the highest number of bids since the Holland Road commercial and residential site (Concept and Price) tender in May 2018 which drew 15 bids from 10 consortiums. This is also much higher than the four to nine bids seen for private residential government land sales sites over the past 18 months,” said Tricia Song, Head of Research for Singapore at Colliers International, who described the site as the most attractive among the Confirmed List in 1H 2020 GLS.
She noted that MCC Land’s top bid comes 4.6% above the second-highest bid by Tucana Residential Pte Ltd and Tucana Commercial Pte Ltd at $889 psf ppr.
Wong Siew Ying, Head of Research and Content at PropNex, attributed the strong interest received to the site’s proximity to the Tanah Merah MRT Station and its palatable land size.
With a leasehold tenure of 99 years, the site has an area of 8,880 sq m and a maximum permissible gross floor area of 24,864 sq m. It could yield 265 residential units as well as 2,000 sq m of commercial space.
“The provision for commercial space at the first storey would also been seen as attractive since there are limited amenities in the immediate areas,” said Wong.
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Meanwhile, the executive condominium (EC) site at Yishun Avenue 9 attracted seven bids, which is in line with the seven to nine bids for EC plots following the cooling measures in July 2018.
With a leasehold tenure of 99 years, the site has an area of 21,514 sq m and a maximum GFA of 60,240 s m. It is about 1.4km from the Yishun MRT station and is expected to yield around 600 housing units.
Sing Holdings submitted the highest bid of $373.5 million or $576 psf ppr.
Wong noted that the top bid of $576 psf ppr is “the highest for an EC site following the $578 psf ppr for the Tampines Avenue 10 EC site awarded in January 2019 and the record of $583 psf ppr for the Sumang Walk EC site that was successfully tendered in March 2018”.
She added that the keen interest for the site was unsurprising since end-user demand is expected to be robust, given that the last two EC sites (The Criterion and Signature At Yishun) sold within the area were in May 2014.
And since EC developers have to wait 15 months after acquiring a site before they could launch the project for sale, the Yishun Avenue 9 EC development would only be launched in 2022.
“By then, it is likely that the impact of COVID-19 would be weakened and that the Singapore economy will continue to recover, albeit gradually,” said Wong.
Desmond Sim, Head of Research for Southeast Asia at CBRE expects the respective bid prices for the two sites to set a new benchmark launch prices for their respective markets and asset classes in the future.
Song expects MCC Land to launch the Tanah Merah Kechil Link project at an average price of between $1,600 psf and $1,700 psf.
Wong, on the other hand, expects the future EC development on Yishun Avenue 9 to be launched from $1,100 psf to $1,200 psf.
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