SINGAPORE- The tenders for two confirmed-list residential sites under the Government Land Sales (GLS) programme for the first half of the year closed on Thursday (Oct 29).
The two 99-year leasehold land parcels - at Tanah Merah Kechil Link and Yishun Avenue 9 - offered for sale by the Urban Redevelopment Authority (URA) and the Housing Board (HDB) respectively, were the first GLS tenders to close since the pandemic began.
A decision on the award of the tenders will be made after the bids for both sites have been evaluated.
Amid the recession, the bids were generally above expectations, analysts say.
The 8,880 square metre site at Tanah Merah Kechil Link, next to Tanah Merah MRT station, attracted 15 bids, with the highest by MCC Land (Singapore) at $248.99 million. This translates to a land rate of about $930 per sq ft per plot ratio (psf ppr), analysts said.
This represents the highest number of bids since the Holland Road commercial and residential site tender in May 2018, which drew 15 bids from 10 consortiums, Colliers International's head of research for Singapore, Tricia Song, noted.
It is also much higher than the four to nine bids seen for private residential government land sales sites over the past 18 months, she added.
The 21,514 square metre executive condominium (EC) site in Yishun Ave 9 drew the highest bid from Sing Holdings at $373.5 million (or a land rate of $576 psf ppr), out of a total of seven bids received by the HDB.
Mr Karamjit Singh, chief executive of Showsuite Consultancy noted that both sites are targeted at the mass-market where the demand for homes remains the strongest.
"The top bid for the Tanah Merah site would require the developer to sell the new apartments for $1,700 to $1,800 psf, which is bullish as new units in that area are trading between $1,500 and $1,600 psf", he said.
Mr Ong Teck Hui, senior director of research and consultancy at JLL, said the site's key attraction is its proximity to the Tanah Merah MRT Station, and its relatively small plot size, requiring less capital outlay.
"The residential development at Tanah Merah Kechil Link is likely to be launched in late 2021 when buying demand could improve alongside an expected economic recovery," he added.
The Tanah Merah Kechil Link site, which is slated for residential with commercial use on the first storey, can potentially yield about 265 units and 2,000 sq m of commercial space.
The provision for commercial space is attractive as nearby amenities are limited, Ms Wong Siew Ying, PropNex head of research and content, said.
The tender period for the Yishun EC site was given an extended public tender period of six months due to the pandemic. Tender durations for residential sites under the GLS programme are typically six to eight weeks.
The 21,514 sq m EC site could yield about 600 homes, and is near Junction 9, a new mall.
ERA Realty's head of research and consultancy Nicholas Mak noted that the top bid for the Yishun EC site "shows that the developer is quite confident as the land rate is higher than the two EC sites launched for sale in 2019."
"At the land rate of $576 psf ppr, the estimated breakeven cost is about $1,000 to $1050 psf. The developer probably plans to launch new units at prices above $1,100 psf," he added.
Confidence could also have been boosted by steady sales at the Piermont Grand, which is 76 per cent sold at median prices of over $1,100 psf, as well as a lack of ECs in the locality over the past six years, Ms Song noted.
The Yishun Avenue 9 site is located at the edge of Yishun town, some 2km from the Yishun MRT station.
"It is the newest EC site in the locality to be offered on the GLS since 2014... so there could be some pent-up demand," she said.