Government serves up ‘degustation menu’ of sites in 2H2020
By Valerie Kor and Cecilia Chow
/ EdgeProp Singapore |
Ask Buddy
SINGAPORE (EDGEPROP) - The 2H2020 government land sales (GLS) programme offered sites to develop just 1,370 residential units in the Confirmed List. It’s the lowest since 1H2016, when 1,560 units were offered for sale under the GLS programme. It’s not surprising against the backdrop of the Covid-19 pandemic.
The Ang Mo Kio Avenue 1 site is a short distance from the future Mayflower MRT station on the Thomson-East Coast Line, and opposite the popular Bishan-Ang Mo Kio Park (Photo: Samuel Isaac Chua/EdgeProp Singapore)
“This is a degustation menu as the Confirmed List presents palatable sites with fewer units but with greater variety in terms of location,” says Desmond Sim, CBRE head of research for Southeast Asia. “Should developers’ appetite for land be unsatiated, they can still order from the Reserve List.”
Unsold units from launched projects totaled 4,506 units in 1Q2020, up slightly from 4,389 units in the previous quarter. Meanwhile, the number of residential units introduced on the Confirmed List has been on the declines since 1H2019 in the aftermath of the en bloc frenzy. “While unsold inventory appears to be under control, there have been some headwinds on unit sales under current showflat restrictions imposed by the government, especially during the “circuit breaker” period,” notes CBRE’s Sim.
Northumberland Road site – city fringe, near amenities
Of the three residential sites on the Confirmed List, Tricia Song, head of research at Colliers International Singapore, believes that the one on Northumberland Road is the most attractive, given its proximity to the MRT station, city fringe location and the palatable land site with the potential to develop 385 units.
The Northumberland Road site is next to the Farrer Park MRT station, One Farrer Hotel and Farrer Park Hospital (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The Northumberland Road parcel located at the corner of Race Course Road and Gloucester Road. It’s next to the Farrer Park MRT station, One Farrer Hotel and Farrer Park Hospital, says Ong Teck Hui, JLL senior director of research & consultancy. Other amenities such as Mustafa Centre, City Square Mall, and shops in Little India are nearby too.
The site has a retail cap of 1,500 sqm (16,146 sq ft) gross floor area (GFA) and a minimum 500 sqm (5,382 sq ft) for a childcare centre. The nearest comparable will be Uptown@Farrer which is currently under construction, says Colliers’ Song. The project has sold 31 out of a total of 116 units at an average price of $1,872 psf since its launch in September 2019. It was also a GLS site, and sold for $1,001 psf per plot ratio (psf ppr) and drew 11 bids at the close of the tender.
Location map of Northumberland Road site
Source: URA
Given the more cautious sentiment and uncertainty around construction costs, Song expects the Northumberland Road site to see five to seven bids and a top bid of $900 to $1,000 psf ppr. She estimates the future launch price of the site to be in the $1,900 to $2,000 psf range.
JLL’s Ong on the other hand expects to see seven to 10 bidders, with a top bid of $1,000 psf ppr.
Ang Mo Kio Avenue 1 site – near amenities, top schools, parks
The Ang Mo Kio Avenue 1 site is attractive too, given the palatable size and potential to build 370 residential units. It is on the edge of Ang Mo Kio Town adjacent to private and public housing, notes Ong.
Location map of Ang Mo Kio Avenue 1 site
Source: URA
It is a short distance from the future Mayflower MRT station on the Thomson-East Coast Line, and opposite the popular Bishan-Ang Mo Kio Park, adds Ong. The site is also located within 1 km of top primary schools such as Ai Tong School, CHIJ St Nicholas Girls’ School and Mayflower Primary School.
According to Colliers’ Song, the nearest comparison would be The Panorama at Ang Mo Kio Avenue 2. Completed in 2017, units were transacted at prices of $1,400 to $1,500 psf over the past 12 months. She expects the site would draw three and five bids with top price of $700 to $750 psf ppr.
Given the site’s location near the park and nature reserve as well as top schools and MRT station, JLL’s Ong reckons there will be six to nine bidders, with a top bid of $850 to $900 psf ppr range.
EC site at Tengah Garden Walk – first in a new town
The third site is an executive condo (EC) site at Tengah Garden Walk with the potential to build 615 units. Tengah is the latest HDB new town, and is envisioned as a “Forest Town”, designed with greenery, sustainable and smart features. It will be the country’s first car-free town centre. “This will be the first EC site in the new town,” notes Colliers’ Song.
Location map of Tengah Garden Walk
Source: URA
The site would likely be served by the new Jurong Region Line which should open progressively from 2026, says Wong Siew Ying, head of research and content at PropNex Realty. When completed, Tengah is estimated to provide about 42,000 new homes, of which 30,000 units will be public housing and 12,000 units will be private housing, she adds.
For a new EC in a yet-to-be-tested location like Tengah, Colliers’ Song expects five to seven bids from developers, at prices of $300 to $400 psf ppr. She is estimating selling price to be in the $700 to $800 psf range, which is similar to the price point of the first few ECs in Punggol back in 2011 to 2013.
Even though the Tengah Walk site is in a relatively less developed area, JLL’s Ong says it could still see “fair demand” due to the lack of new EC projects in the west. The last time an EC site was sold in the west was Westwood Residences EC site, which was acquired jointly by Koh Brothers and Heeton Holdings in January 2014. As such, he expects the site to receive four to six bidders and top bids in the $480 to $520 psf ppr.
Despite the low level of new supply via the Confirmed List, in the event of a V-shaped recovery in the residential sector, the government has put the bulk of the supply through the Reserve List, which now stands at 5,300 units (Photo: Samuel Isaac Chua/EdgeProp Singapore)
A V-shaped recovery in residential sector?
“As the three sites are scheduled to be launched for tender in 4Q2020, their tender closing is likely to be in 1H2021 and project sales launch would probably be in 2022,” says JLL’s Ong. “If bidders assess that the worst of the current crisis could be over by then, we could see positive bidding for the sites. Nevertheless much depends on how the crisis unfolds in 2H2020 and early 2021 which will ultimately determine the manner of bidding when tenders for the sites close.”
All eight sites on the Reserve List in the 1H2020 GLS Programme will be carried over to 2H2020. An additional site on Lentor Central was added. It can yield 610 residential units and 8,000 sqm of commercial space. It’s also near a private residential enclave and near the upcoming Lentor MRT station on the Thomson-East Coast Line, says PropNex’s Wong.
Despite the low level of new supply via the Confirmed List, in the event of a V-shaped recovery in the residential sector, the government has put the bulk of the supply through the Reserve List, which now stands at 5,300 units, says Christine Li, head of research for Singapore and Southeast Asia at Cushman & Wakefield.
Read also:
Ask Buddy
Follow Us
Follow our channels to receive property news updates 24/7 round the clock.
EdgeProp Telegram
EdgeProp FacebookSubscribe to our newsletter
Top Articles
Search Articles