MCC Land-Hao Yuan launched highest number of projects in 2016

/ The Edge Property |

December 28, 2016 9:00 AM SGT

Despite 2016 being a difficult year, MCC Land and its partner Hao Yuan Investment launched three projects that make up a total of 1,720 units. They started with Northwave executive condo (EC) in Woodlands in July, followed by The Alps Residences in early October and Queens Peak the following month. As at Dec 11, MCC Land and Hao Yuan had sold a total of 1,117 units this year, from new launches and existing projects (see tables).

“We are encouraged by the overall sales achieved in 2016 as this has been a challenging year underpinned by uncertain geopolitics as well as the sustained effect of the property cooling measures,” says MCC Land managing director Tan Zhiyong. “We attribute the encouraging sales to well-positioned products, coupled with competitive pricing strategy.”

MCC Land saw unprecedented sales at The Alps Residences, with 280 units sold on the first day of its launch, or 44% of the total units. By mid-December, 356 units (56%) had been taken up. The strong sales momentum gives Tan the confidence to claim that “the Alps Residences could be one of the best-selling projects of the year”.

Tan: Given its strong sales, The Alps Residences could be one of the best-selling projects of 2016

The Alps Residences’ success has an added benefit: It sparked a rebound in sales at the neighbouring The Santorini. Close to 100 units were sold at the latter in the last two months, adding up to total sales of 262 units (44%) out of 597. MCC Land plans to relaunch The Santorini after it obtains a Temporary Occupation Permit in 2Q2017.

Active interest in Queenstown area

A month after launching The Alps Residences, MCC Land and Hao Yuan Investment launched Queens Peak. The 736-unit development is located on Dundee Road and linked directly to the Queenstown MRT station. Since early November, 275 units (37%) have been sold. Tan remains confident that the project will continue to see steady sales as it boasts 77 lifestyle facilities, smart-home features and private lift access for the three-, four- and five-bedroom apartments that make up 20% of its total units. These are located from the 28th to 44th floors and, therefore, enjoy unblocked views.

The crowd at The Alps Residences, which saw 280 units sold on the first day of its launch

The recent sale of a land parcel in the nearby Margaret Drive has also buoyed Tan’s confidence. The tender for the site under the government land sales programme closed on Dec 6, with 14 bids. The top bidder, MCL Land, won with a bid of $238.39 million, which translates to a unit price of $998 psf per plot ratio (psf ppr). This is 7.9% higher than the next highest bid; it is also the widest gap between a top and second- highest bid for a GLS site sold this year, says Nicholas Mak, head of research and consultancy at SLP International.

“The strong sales of the nearby Queens Peak may have encouraged the developers to bid for the site,” adds Mak. “Given the current slow residential property market, land parcels of a manageable size with strong selling points will attract many suitors.” The site at Margaret Drive is about 600m and one bus stop from both the Commonwealth and Queenstown MRT stations.

Prospective buyers at Queens Peak, the 736-unit project that will be linked to the Queenstown MRT station in the future

The top bid for the Margaret Drive site is 14.5% higher than the $871 psf ppr paid by Hao Yuan Investment for the Queens Peak site in June 2015, and the $883 psf ppr City Developments forked out for the 845-unit Commonwealth Towers in June 2013. And the latest site at Margaret Drive is further from the MRT station, notes Mak. “The high participation rate and bid price are indications that many developers are hungry for land. Those interested in this site were also aware of the potentially fierce competition for the tender. To have a fair chance of winning, their bids had to be bullish.”

Based on the land price of $998 psf ppr for the Margaret Drive site, Mak estimates that the new project could be priced at $1,700 psf when it is launched between late 2017 and early 2018.

‘Open to en bloc purchases’

This year has been significant for MCC Land and Hao Yuan as they have collectively launched the most number of projects and units in a single year since MCC Land’s inception in Singapore in 2010. However, there are no new launches planned for 2017 as both partners have exhausted their landbank. Tan says they are open to buying sites through GLS tenders, as well as en bloc purchases of sites, although they are well aware of the protracted process involved in collective sales.

Over the last few years, Tan has also aggressively explored various regional markets, including Malaysia, Indonesia and India. However, MCC Land has not made any purchases outside of Singapore to date. “We feel we need more time to under stand these regional markets before capitalising on some of the develop ment opportunities presented to us,” he says.