Scale model of Tembusu Grand which officially launched on April 8. (Picture: Samuel Isaac Chau/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - The tenders for two residential sites on the Confirmed List of the Government Land Sales (GLS) programme for 1H2023 will close on July 18. The tenders for the sites were launched in March.
Despite having the same tender close date, both sites are slated for different types of residential developments. A condominium is planned for the Jalan Tembusu site, while the Tampines Street 62 (Parcel B) site is slated for an executive condominium (EC).
The 20,572 sq m (221,438 sq ft) site along Jalan Tembusu has a maximum gross floor area (GFA) of 72,003 sq m (775,040 sq ft). URA estimates that 840 condominium units can be built on the 99-year leasehold plot.
Parents will be pleased to know that there are five local schools within a 1km radius, including popular schools such as Tanjong Katong Girls' School, Haig Girls' School, and Chung Cheng High School (Main).
Additionally, the GLS site is located beside the Canadian International School (Tanjong Katong Campus). Teachers at the school and expatriates with children attending the school will provide a ready pool of tenants for the future condominium.
Other nearby amenities include two upcoming MRT stations on the Thomson-East Coast Line. Tanjong Katong and Marine Parade MRT Stations are within a 1km radius of the site. However, both MRT stations are expected to be operational only next year. Dakota MRT Station on the Circle Line is the nearest active MRT station, but it is more than 1km away.
Katong Shopping Centre, Katong Plaza, and Roxy Square are within walking distance, while Parkway Parade and Marine Parade Central Market and Food Centre are a short drive away. Other amenities within a 1km radius include East Coast Park and Chinese Swimming Club.
There is a land parcel designated for a nursing home beside the Jalan Tembusu GLS site. A nearby nursing home could be viewed negatively by some buyers. However, its proximity might be appreciated by elderly buyers or buyers with elderly parents.
Additionally, there will be a 0.52-ha public park beside the subject site, which the successful tenderer must design and build in accordance with the requirements of NParks and URA. The tender document for the GLS site indicates that the park must be senior-friendly but also cater to users of all ages. The future public park also has nine rain trees that must be retained.
The park will increase the development cost of the Jalan Tembusu site for the successful tenderer, but the green open space will enhance the overall attractiveness of the neighbourhood.
The developer of the future development on the Jalan Tembusu GLS site is expected to face intense competition for buyers because there are three new condominiums within a 1km radius.
Tembusu Grand saw 53% of its units sold at an average price of $2,465 psf during its recent launch. The leasehold condominium is located just across the road from the subject site. An advantage that the GLS site has over Tembusu Grand is its closer proximity to the upcoming Tanjong Katong MRT station.
The other two nearby new condominiums are leasehold Grand Dunman and freehold The Continuum, which are expected to launch later this year.
Together, the three new condominiums have 2,457 units, which are expected to soak up much of buyers' demand for condominiums in the neighbourhood. This could translate to weaker demand from buyers for the future condominium on the GLS site.
Developers are expected to closely watch the sales performance of Tembusu Grand. The sales performance of Grand Dunman will also be closely scrutinized if it is launched before the tender closes for the Jalan Tembusu site. Their sales performance is expected to impact the tender price and the number of bidders for the GLS site.
The launch of The Continuum is also expected to have marginal implications on the bid for the upcoming Jalan Tembusu site because of its freehold tenure and hence higher price point. Moreover, it was purchased in a collective sale for $1.1 billion ($1,440 psf ppr) by Hoi Hup Realty and Sunway Developments in November 2021. The other two upcoming condominiums are on GLS sites that were awarded last year.
The site for Tembusu Grand was awarded to City Developments Limited for $768 million ($1,302 psf ppr), while the plot for Grand Dunman was awarded to SingHaiyi Group for $1.284 billion ($1,350 psf ppr). The winning bid for the Jalan Tembusu GLS site is expected to be within the same price range as these two previously awarded GLS sites.
HDB estimates that 700 EC units can be built at the Tampines Street 61 (Parcel B) GLS site. The 28,000-sq m (301,394 sq ft) land parcel has a maximum GFA of 70,001 sq m (753,491 sq ft).
The subject GLS site is located beside Tenet, which is an EC with 616 units. Tenet drew over 5,000 visitors during its preview weekend in November 2022 and sold 72.3% of its units during the launch weekend.
As of February, Tenet has a cumulative take-up rate of 97.1% and a current average price of $1,378 psf. The popularity of Tenet with buyers might encourage more developers to bid for the subject GLS site.
Tenet sits on a GLS plot that was awarded in August 2021 to Qingjian Realty and Santarli Construction for $422 million ($659 psf ppr). The winning bid for the subject GLS site is not expected to stray too far from the winning bid submitted for the land parcel of Tenet.
A nearby empty land parcel along Tampines Avenue 11 is slated for an integrated development that will have not only condominium units, but also a community club and a hawker centre. In addition, the development will be integrated with a bus interchange. This future integrated development is expected to increase the number of amenities in the neighbourhood and further enhance its appeal.
The tender for the integrated development site is set to close on June 27, which is less than a month before the tender closes for the subject site. Therefore, it can be expected that the residential units for both developments will be launched around the same time.
However, the developer for the Tampines Street 62 (Parcel B) GLS site is not expected to face intense competition for buyers from the integrated development because both sites are slated for different types of residential uses. The GLS site at Tampines Street 62 (Parcel B) will have an estimated 700 units of EC while the integrated development site will have an estimated 1,190 condominium units. As such, the residential units for both sites are likely to be launched at different price points and attract different types of buyers.
The current average price for new sales of leasehold condominiums in District 18 is $1,859 psf, while new ECs in the same district are fetching a lower $1,401 psf.
If both future developments are launched around the same time, it may benefit them as the combined marketing efforts could potentially generate more visibility and attention for both projects and the neighbourhood.
There are limited existing amenities within walking distance of the GLS site because it is located in a relatively undeveloped neighbourhood. Some nearby amenities include White Sands and the upcoming Pasir Ris Mall. Three mega stores - Giant, Ikea, and Courts - are a short drive away.
In addition, there are five local schools within a 1km radius, including Elias Park Primary School, Meridian Primary School, and Park View Primary School. Two international schools - United World College of South East Asia (East Campus) and Overseas Family School - are within a 2km radius.
The nearest active MRT station is Pasir Ris MRT Station on the East-West Line, but it is more than 1km away. Tampines North MRT Station on the Cross Island Line is nearer at about 540m away, but it is expected to be completed only in 2030.
The site is located beside the Tampines Expressway, which provides easy connectivity for future residents. However, residents in units facing the expressway might experience more traffic noise. Future construction on nearby empty land parcels slated for high-rise developments will add to the noise pollution.
Developers might want to note that a corner of the GLS site abuts an existing sub-station, which can be deemed an eyesore by potential buyers. As such, the developer will have to ensure sufficient screening and minimise the number of units facing the sub-station.
A major difference between the two GLS sites is their designated use. The Tampines site is for an EC, while the Jalan Tembusu site is for a condominium. The future EC along Tampines Street 62 is likely to appeal to buyers with a more modest housing budget, such as HDB upgraders. Owner-occupiers and investors with a higher housing budget are more likely to consider the future condominium along Jalan Tembusu. (Find HDB flats for rent or sale with our Singapore HDB directory)
The current average price for new leasehold condominiums in Singapore is $2,405 psf. The current average price for their EC counterparts is $1,383 psf; cheaper by $1,022 psf. It is notable that the difference in average price for both types of property has widened in recent years. The price gap was only $967 psf last year and $570 psf in 2013.
The Jalan Tembusu site is located in District 15, while the Tampines Street 62 (Parcel B) site is located in District 18. As both sites are in vastly different neighbourhoods and will have different types of developments, they are expected to command different prices in the resale market.
Resale ECs in District 18 and resale leasehold condominiums in District 15 are fetching $1,149 psf and $1,411 psf, respectively. Moreover, resale ECs in District 18 have shown stronger price growth (37% since 2013) compared to leasehold condominiums in District 15 (28%).
As such, the future EC on the Tampines Street 62 (Parcel B) site will be more ideal for buyers looking for an affordable roof and who are willing to put up with some inconvenience. However, buyers should benefit from capital appreciation as the neighbourhood develops.
Investors might find the future development on the Jalan Tembusu site more appealing due to the close proximity of an international school. The future development might also attract owner-occupiers who are looking to downsize from their nearby landed homes or young couples with parents living in one of the landed properties.
Overall, the different locations and designated residential types of the two GLS sites are likely to appeal to different groups of buyers.
Developer of the EC site in Tampines may face less intense competition for buyers as its nearest competitor, Tenet, is almost fully sold. In contrast, developer of the Jalan Tembusu site will have to fend off competition with three condominium projects that have either launched or will launch this year.
Developers will likely take their cues from the winning bids for nearby GLS sites that have recently been awarded, as well as the sales performance of recent launches in the vicinity, when determining their bid prices and if they wish to participate in the tender.
Check out the latest listings near Jalan Tembusu, Tembusu Grand, The Continuum, Tenet, Tanjong Katong MRT Station, Marine Parade MRT Station, Dakota MRT Station, Pasir Ris MRT Station, Tampines North MRT Station, Tanjong Katong Girls' School, Haig Girls' School, Chung Cheng High School (Main)