A view of Beauty World MRT station and the construction of The Linq @ Beauty World. The Bukit Timah Link GLS site is next to this construction site. (Picture: Samuel Isaac Chua/The Edge Singapore)
SINGAPORE (EDGEPROP) - The tenders for two government land sale (GLS) sites closed on Nov 3. Both sites are under the 2H2022 GLS Programme and were launched in August this year.
Read also: Residential GLS sites at Bukit Timah Link and Hillview Rise launched for sale
The first is a 49,633 sq ft site at Bukit Timah Link close to Beauty World MRT Station on the Downtown Line. The other site is at Hillview Rise and is about 111,893 sq ft.
Bukit One, a subsidiary of Bukit Sembawang Estates, submitted the top bid of $200 million for the site at Bukit Timah Link. This translates to a tendered sale price of $1,343 psf per plot ratio (ppr).
The top bid is 15.7% higher than the next highest bid, which was submitted by Winchamp Investment at $172.89 million ($1,161 psf ppr).
According to Lee Sze Teck, senior director of research at Huttons Asia, the Bukit Timah Link site saw "‘robust participation" with five developers each submitting their own tenders.
“The small site and palatable quantum attracted many bidders. The site is very attractive as it is right next to Beauty World MRT Station entrance,” says Lee. He adds that the various transport connectivity options via nearby highways, and food and retail options in the vicinity add to desirability of the site.
Using EdgeProp’s Landlens analytics tool, the estimated selling price of the new development could be approximately $2,360 psf.
Based on the highest tendered bid price for the Bukit Timah Link GLS site, the new development could sell for about $2,360 psf. (Map: EdgeProp Singapore)
On the other hand, the Hillview Rise GLS site attracted four bids. The top bid of $320.78 million was jointly submitted by Far East Civil Engineering and Sekisui House. This translates to a tendered sale price of $1,024 psf ppr.
This bid price is 1.3% higher than the next highest bid which was submitted by CDL Constellation at $316.8 million ($1,012 psf ppr).
"We are delighted to have emerged the top bidder of the prime site at Hillview Rise. This presents an excellent opportunity for Sekisui House and Far East Organization to create another notable residential property in the Upper Bukit Timah enclave," says Marc Boey, executive director, Property Services and Chief Operating Officer, Far East International on behalf of the JV.
"In the same area, we will soon be launching The Reserve Residences in 1Q2023. We have also developed numerous other quality projects in the area such as Hillvista, The Lanai, and mixed-use development The Hillier & HillV2," says Boey. He adds that the proposed residential project will comprise two blocks of 27 storeys with around 330 residential units.
Overall, both GLS sites attracted a "healthy" number of bids from developers, says Steven Tan, CEO of OrangeTee & Tie. “Developers may have confidence that the projects will be well received when launched for sale since there is limited supply in the area. Moreover, (already-launched) projects in the vicinity are either fully or substantially sold,” he says.
For example, the new development on the Hillview Rise site is unlikely to see much direct competition when it launches for sale as the neighbouring Midwood is fully sold, says Tan. Midwood is jointly developed by Hong Leong Holdings and Hong Realty and the project launched in October 2019. The project managed to command an average selling price of $1,737 psf based on URA caveats.
Meanwhile, a GLS site at nearby Dairy Farm Walk was awarded to entities under Sim Lian Group who submitted the winning bid of $347 million ($980 psf ppr) when the tender closed in March this year.
Using EdgeProp’s Landlens analytics tool, the new development on Hillview Rise could reach a selling price of about $2,042 psf.
Based on the highest tendered bid price for the Hillview Rise GLS site, the new development could sell for about $2,040 psf. (Map: EdgeProp Singapore)
These are the first GLS sites whose tenders closed after the latest round of property cooling measures were implemented in September this year. According to Nicholas Mak, head of research & consultancy at ERA Realty, the tender results “suggest a more cautious attitude among property developers”.
Mak says that the participation rate among developers was lower than expected and the top bid of the Hillview Rise site is lower than the $1,068 psf ppr paid by Hong Leong Holdings and Hong Realty.
Wong Siew Ying, head of research and content at PropNex Realty, also felt that “developers’ participation in these latest public land tenders was less active than we had expected, particularly for the Bukit Timah Link site,” she says.
“Despite the strong sales performance at recent new launches, the level of participation is indicative of the cautious sentiment amongst developers – who are likely wary of the global headwinds and economic uncertainties going forward,” says Wong.
“The economic outlook has taken a pessimistic turn with increasing interest rates, inflation and recessionary pressures,” says Leonard Tay, head of research, Knight Frank Singapore. “Despite this, developers are still keen to acquire land to provide new product to a private residential market that is currently under supplied”.
The real estate market also suffers from other risk factors such as higher construction costs, government intervention with property cooling measures, non-remissible ABSD, and revised GFA definitions, says Tay.
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