Hoi Hup Realty-Sunway Developments submit highest bid for Plantation Close EC site at $701 psf ppr

The Executive Condominium (EC) land parcel is adjacent to another EC site at Plantation Close in Tengah (Source: EdgeProp LandLens)

SINGAPORE (EDGEPROP) - The executive condominium (EC) site at Plantation Close in Tengah received four bids at the close of its tender on Feb 1. Its closing is batched with that of a government land sale (GLS) site at Orchard Boulevard site which closed on the same day.

A joint venture between Hoi Hup Realty and Sunway Developments emerged as the top bidder for the Plantation Close EC site, with a top bid of $423.38 million that translates to a land rate of $701 psf per plot ratio (ppr).

The second highest bid of $416.89 million ($690 psf ppr) came from a consortium comprising Forsea Holdings and Qingjian Realty. Their bid was only 1.57% lower compared to the amount submitted by Hoi Hup and Sunway.

In terms of the land rate, the $701 psf ppr submitted by Hoi Hup and Sunway is close to an earlier bid for an adjacent EC site that was awarded to the same joint venture developers last September. The JV topped a list of nine bidders with a winning bid of $348.5 million - a record land rate of $703 psf ppr for an EC development site.

The September 2023 EC site drew a total of nine bids from other established developers such as City Developments (CDL), Hong Leong, CapitaLand Development and Frasers Property.

Lee Sze Teck, senior director of data analytics at Huttons Asia, notes that if Hoi Hup and Sunway are awarded the latest EC site, they could have the option to create a mega EC project by amalgamating the two sites, subject to authorities' approval. The earlier Plantation Close EC site could yield about 495 units, while this latest site has the potential for 560 units. Combined, the result is a 1,055-unit EC.

A decade ago, MCL Land likewise emerged at the top of bids submitted for two adjacent sites at Choa Chu Kang Parcel A and Parcel B. When both sites were awarded to MCL Land, the developer merged them into one, resulting in the 1,3277-unit Sol Acres. The mega EC project was launched in August 2015 and fully sold. Units sold in the resale market in January ranged from $1,376 psf to $1,504 psf.

“Should Hoi Hup Realty and Sunway Developments be awarded this second Plantation Close EC plot, they would be in a position to strategically synchronise the timing and pricing of the launch of these ECs," says Leonard Tay, head of research at Knight Frank Singapore: He predicts a possible launch price of about $1,400 psf with an average selling price between $1,450 psf to $1,550 psf.

Marcus Chu, CEO of ERA Singapore, says that the relatively marginal price difference between the highest and second highest bid signifies that developers are “assured and confident” in the continued strength of EC demand. “Based on the top bid price, the estimated selling price could start from $1,500 psf,” he adds.

The strong developer demand for EC projects stems from a sustained and healthy demand from HDB upgraders in recent years, says Justin Quek, CEO of OrangeTee & Tie. He adds: “Prices of new suburban private homes have risen at a faster rate compared to prices of new ECs (in recent years), making new ECs a more affordable option (for HDB upgraders). Additionally, eligible buyers upgrading from an HDB flat to a new EC do not have to pay ABSD upfront since they are only required to dispose of their current flat within six months of collecting the keys to their new EC.”

Lee agrees, citing the latest sales launch of Lumina Grand, an EC which sold 53% of its 512 units at an average price of S$1,464 psf at the end of its first-weekend launch on Jan 28. “Many Singaporeans recognise that ECs offer similar condo facilities at an attractive entry price. There are also less than 500 unsold EC units in the market as of Feb 1,” he says.

Another EC, Altura – at Bukit Batok West Avenue 8 – sold 61% of 220 units on its launch day in August last year, with an average price of $1,433 psf. To date, it has sold 92% or 330 of its units.

The 99-year leasehold Plantation Close site is under the government land sales (GLS) programme’s confirmed list for 2H2022. It sits on a land area of about 215,689 sq ft and is expected to yield about 560 housing units.

This is the third EC site that has been released in the future town of Tengah to date. The first EC site in Tengah was purchased by a joint venture between CDL and MCL Land at $603 psf ppr in June 2021. It was launched as the 639-unit Copen Grand in October 2022. The project was fully sold a month later at the balloting for second-timers.

According to Huttons' Lee, the EC site at Plantation Close will enjoy improved connectivity when two MRT stations (Bukit Batok West and Tengah Park) on the Jurong Region Line are completed in phases from 2027 to 2029. “The Tengah Park MRT station will be within walking distance and can bring residents to the second Central Business District at Jurong East in less than 10 minutes,” he says.

The future Tengah Integrated Transport Hub and Tengah Boulevard Bus Interchange are also under development.