Real estate consultants expect demand to remain strong given the dearth of new launches in the past few years
THE Housing and Development Board (HDB) on Monday released two executive condominium (EC) sites, one along Fernvale Lane in Sengkang and the other on Tampines Street 62. Both 99-year leasehold land parcels can yield up to a total of 1,100 residential units, HDB said. The Fernvale site was launched for sale by public tender, under the confirmed list of the H2 2019 government land sales (GLS) programme.
It spans 17,130 square metres (sq m) in land area, with a permissible gross floor area (GFA) of up to 47,964 sq m and a maximum building height of 56 metres above mean sea level. Its estimated number of units is 480. The Sengkang site is across the road from Greenwich V mall. Fernvale LRT station is a nine-minute walk away, and schools nearby include Fernvale Primary School and Sengkang Green Primary School.
Nicholas Mak, head of research and consultancy at ERA Realty, said: "This site will be popular among EC developers as there is a limited supply of unsold EC units in the primary market. There are fewer than 380 launched and unsold new EC units in the market." Although there are four EC developments that could be launched in the next 15 months, each launch is "very likely" to be months apart from each other, he added.
The site may attract HDB flat owners hoping to upgrade to private housing, said Christine Sun, OrangeTee & Tie's head of research and consultancy. "Over 10,000 HDB flats have reached their five-year minimum occupation period (MOP) in these two areas this year, with more flats reaching their MOP next year," Ms Sun said. Mr Mak expects the tender to draw six to nine bids, with the top bid at S$280-295 million, which will translate to a land rate of S$540-570 per square foot per plot ratio (psf ppr).
Tricia Song, Colliers International's head of research for Singapore, expects seven to nine bids for the site. The top bid will likely come in at S$260 million or S$500 psf ppr, with a projected end-selling price of S$950-1,000 per square foot (psf), she said.
The Sengkang tender closes at noon on March 3, 2020. The tender closing will be batched with those of two other residential sites at Canberra Drive which URA launched in November. Meanwhile, the Tampines land parcel was released for application under the reserve list of the H2 2019 GLS programme. Reserve-list sites will be put up for tender when a developer has indicated a minimum price which is accepted by the government.
Mr Mak does not expect the site to be triggered for tender in the coming months, given that Tampines Street 62 is still under construction and there are empty plots of land adjacent which could potentially add to the residential land supply and lead to muted demand from developers. Colliers' Ms Song noted that there is a new 700-unit EC nearby at Tampines Ave 10 which could be launched by mid-2020. "A good performance (at the Ave 10 EC) could trigger the release of this reserve-list site on Street 62," she said. "Otherwise, we believe there is ample new private stock in the Tampines/Pasir Ris precinct."
Likewise, Ms Sun from OrangeTee said developers are likely to observe the sales take-up of residential projects slated to launch in the first half of next year - such as Ola at Anchorvale Crescent, and Parc Canberra at Canberra Link - before deciding whether they want to trigger the tender for the reserve site.
The Tampines Street 62 site takes up 23,799 sq m in land area, with a maximum GFA of 59,498 sq m and a maximum building height of 63-64 metres above mean sea level. The estimated number of units is 595. It is a four-minute drive to Pasir Ris MRT station. Schools nearby include Tampines North Primary School and Dunman Secondary School. Once a tender is launched for the site, the top bid might come in at around S$336-360 million, which will translate to a land rate of S$525-562 psf ppr, Mr Mak noted.
Commenting on the general trend for ECs in 2020, Ms Sun said that demand is expected to remain strong given the dearth of new launches in the past few years. Further, the pool of eligible buyers has grown after the government raised the income ceiling to S$16,000 from S$14,000 for Singaporean households looking to buy EC units, she added.
Adapted From The Business Times, Dec 31 2019