Developer Qingjian Realty had intended to launch its 105-unit, private condominium  The Arden in 1Q2022. The sales gallery on the site at Phoenix Road was completed early this year. However, as the year draws to a close, launch activities have yet to be set in motion. Yen Chong, deputy general manager of Qingjian Realty confirms that the launch has been delayed.

The hold-up is due to the approval for the purchase of three adjoining remnant State land parcels at Phoenix Road. “It is still pending authorities’ approval,” says Chong. “We hope we will get it soon.”

When contacted by EdgeProp Singapore, a Singapore Land Authorities (SLA) spokesperson would only say: “SLA is reviewing the application with the relevant agencies and will issue the offer as soon as possible.”

Amalgamating remnant State land parcels with private properties is not new. In fact, developers are encouraged to purchase such remnant sites if they want a regular-shaped plot.

Qingjian Realty purchased the former Phoenix Heights en bloc for $42.6 million at the close of the tender on July 25, 2019. The developer has also gone ahead with the purchase of the three remnant State land parcels adjoining the site.

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Delay due to complexities of buying three remnant sites

One of the three remnant sites is a strip of land at the boundary of The Arden’s site along Choa Chu Kang Road. It is said to house the drainage reserve. The other two remnant sites are at the rear end: a rectangular site is said to house a substation, and the other, a smaller square site, is where the disused gas pipes that served the former units of Phoenix Heights are located (see EdgeProp Landlens).

An earlier written permission (WP) submitted to URA in November 2021 reflected that it was still subject to the successful alienation of two of the State land parcels at lots MK10-01494M and MK10-01654C.

Based on the revised WP submitted on March 1, 2022, the 105-unit residential development will have three blocks spanning five storeys, with a basement carpark, swimming pool and communal facilities sitting on Plot 1, which is the main site.

The developer has to give Public Utilities Board (PUB) access to the drainage reserve at Plot 2, “without the State making any payment or giving any consideration whatsoever for the same with vacant possession and free from encumbrances prior to the issue of the Certificate of Statutory Completion by the Building and Construction Authority”.

Under the conditions of the WP, the developer will have to meet the “requirements of technical agencies”, namely the Land Transport Authority (LTA), National Parks Board (NParks) and PUB.

According to sources, another complication could be due to the ownership of the remnant site with the electrical substation. The site is under the ownership of Singapore Power, which is now a corporatised entity. And the land has to be sold back to SLA.

Hence, to date, only the smallest of the three remnant sites has been successfully amalgamated: it is the one with the disused gas pipes that had once served the 24 apartments and 12 shops of the former Phoenix Heights.

“While it’s normal to have multiple agencies involved in the purchase of remnant sites, it is quite unusual for the approval to be delayed for so long,” says a source who declines to be named. “Perhaps it is the acquisition of three remnant lots and not just one, that is leading to the complexity, and the delay in the approval of the purchase by SLA as it has to coordinate with all the different agencies.”

As Qingjian had submitted the application for the purchase of the three remnant sites prior to Sept 1, 2022, the purchase price will be based on the earlier rate of 50% of the full land value, determined by applying a factor of 5/7 to the applicable land betterment charge rate, says SLA in a press release. From Sept 1, acquisitions of remnant State land parcels will be based on 100% of the full land value of the site.

The Arden's land rate - equivalent to GLS sites for ECs today

The launch of The Arden is expected to take place sometime in 2023, a year later than the developer had intended. Meanwhile, the clock is ticking towards the 5½-year deadline for the remission of the 35% additional buyer’s stamp duty. For Qingjian Realty, that date is estimated to be at the end of January 2025. This means the developer has about two years left to sell the 105 residential units at The Arden.

Besides the six-month extension for the sales period to 5½ years, the project completion date has been extended by 12 months to November 2025, as part of the Covid-19 relief measures for developers.

In hindsight, Qingjian Realty’s purchase price for the site on Phoenix Road is attractive compared to the land price of government land sales (GLS) sites today. The 63,000 sq ft site has a 99-year lease with effect from 1969, which means the developer has to pay a differential premium for the lease top-up. The purchase price of $42.6 million, therefore, translates to an estimated $630 psf per plot ratio (psf ppr).

This is 38.5% below the $1,024 psf ppr that Far East Organization and Sekisui House paid for the GLS site at Hillview Rise at the close of the tender on Nov 3. The price of $630 psf ppr is also 53% below the $1,343 psf ppr that Bukit Sembawang Estates paid for the GLS site at Bukit Timah Link adjacent to the entrance of Beauty World MRT Station. The tender for the Bukit Timah Link also closed on Nov 3.

The $630 psf ppr is equivalent to the price of GLS sites for executive condo (EC) development sites today, points out Lee Sze Teck, senior director of research at Huttons Asia. In mid-September, City Developments Ltd (CDL) paid $626 psf ppr for the EC site at Bukit Batok West Avenue 5, while Qingjian Realty paid $662 psf ppr for the EC site at Bukit Batok West Avenue 8 in March this year.

What will The Arden be priced at? 

EC projects launched this year have already seen selling prices cross $1,300 psf. For instance, the 639-unit Copen Grand in Tengah Garden Walk, launched jointly by CDL and MCL Land in September, saw 485 units (75.9%) sold to date at an average price of $1,337 psf. CDL and MCL Land had paid $603.17 psf ppr for the site in May 2021.

Meanwhile, the consortium of Qingjian Realty, Santarli Realty and Heeton Holdings is launching the 618-unit Tenet EC at Tampines North on Dec 3. The indicative average price is estimated at $1,331 psf. The Qingjian Realty-led consortium paid $659 psf ppr for the EC site at Tampines North in July 2021.

Suburban 99-year leasehold condos have been launched this year at average prices just above $2,100 psf, such as Amo Residence at Ang Mo Kio Rise in July, where 98% of 372 units were sold on the first weekend of launch; Sky Eden@Bedok with 75% of 158 units sold in early September; and Lentor Modern, where 85% of units have been sold as at Nov 21.

“Qingjian Realty paid $630 psf ppr for the site – it’s the most attractive land rate today – they could create a stir in the market by launching The Arden at a price between new launches of ECs and suburban condos today. That will attract keen interest,” says Huttons Asia’s Lee.

Adjacent to The Arden is Hillsta, a 416-unit, 99-year leasehold development with a mix of condominiums, Soho’s and townhouses. Developed by Far East Organization, the project was completed in 2012. The latest median price at Hillsta is $1,241 psf, based on transactions from June to November 2022.

Further down on Phoenix Road and separated from The Arden by the Phoenix Park playground is the 74-unit Phoenix Residences by OKP Holdings. Launched in December 2020, about 95% (70 units) of the project has been sold to date at an average price of $1,554 psf. Based on caveats lodged from June to November 2022, the median price is $1,626 psf.

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