New Reporter
02-02-24, 12:36
Tengah EC parcel draws fewer-than-expected bids, topped by Hoi Hup-Sunway’s S$701 psf ppr
Feb 01, 2024
https://i.imgur.com/ehGDFi4.jpeg
AN EXECUTIVE condominium (EC) development site at Plantation Close in Tengah garnered fewer-than-expected bids from developers, with the top bid of S$423.4 million or S$701 per square foot per plot ratio (psf ppr) coming from Hoi Hup Realty and Sunway Developments.
The Housing and Development Board tender that closed on Thursday (Feb 1) attracted four bids, when market watchers had anticipated up to eight offers to come in at around S$710 psf.
The Hoi Hup-Sunway joint venture’s bid was 1.6 per cent higher than the next highest offer of S$690 psf ppr from Qingjian Realty and Forsea Residence at S$416.9 million. Hong Leong Holdings and Mitsui Fudosan followed with a bid of S$398.6 million or S$660 psf ppr, while a City Developments Ltd (CDL) subsidiary put in a S$383.8 million offer at S$636 psf ppr.
https://i.imgur.com/kW00MB2.png
“We think a key reason for the moderation in the number of bids for this EC site could be developers’ consideration about the oncoming EC supply at the adjacent plot, which could potentially yield 495 new units,” said Wong Siew Ying, PropNex Realty’s head of research and content.
Thursday’s top bid was just a shade under what Hoi Hup-Sunway paid for the neighbouring site in Plantation Close at a tender in June last year. The earlier site, which saw nine bidders piling in, was sold for S$703 psf ppr, or S$348.5 million.
CBRE pointed to competition from two nearby Bukit Batok West Avenue projects, Altura and Lumina Grand.
“However, the firm pricing continues to reflect developers’ confidence in the EC market, as the segment is generally not as affected by the recent property cooling measures due to the higher proportion of owner-occupiers and first-time buyers,” said Tricia Song, CBRE head of research for Singapore and South-east Asia.
The firm bids showed developers’ continued preference “to play safe by placing bets on upgraders’ market”, and that despite the relatively large size of the project – with 560 units – developers have confidence in its saleability.
“There is also a limited supply of new EC units in the market, and developers are seeking a less risky development site to add to their inventory,” she said.
Huttons Asia’s senior director for data analytics, Lee Sze Teck, noted that there are currently fewer than 500 unsold EC units in the market.
Singapore Realtors Inc’s (SRI) head of research and data analytics, Mohan Sandrasegeran, said: “Hoi Hup Realty and Sunway Developments are solidifying their presence in the Tengah area, marking this location as a focal point of their development strategy, suggesting a deep-seated confidence in the area’s potential.”
Agreeing, JLL’s head of residential research, Chia Siew Chuin, said the bid by the Hoi Hup-Sunway joint venture is “a prudent and defensive strategy to maintain their presence and dilute competition in the vicinity”.
“This move also ensures that they can price the future units in an affordable yet profitable manner,” she said.
Winning the second Plantation Close EC plot would place the developer in a position to strategically synchronise the timing and pricing of the launch of these ECs, said Leonard Tay, Knight Frank Singapore’s head of research.
CBRE’s Song added that the developer could capitalise on economies of scale by amalgamating the sites to form a single mega project of over 1,000 units.
Land prices for EC projects have trended steadily upwards in the last two years, with EC launch prices rising in tandem. While projects marketed in 2022 were about 70 per cent sold at launch and priced around S$1,300 psf, sales appear to have slowed somewhat with the higher prices. The latest EC to come to market – CDL’s Lumina Grand – moved 53 per cent of its units in January 2024 at S$1,464 psf on average.
The first EC site sold in Tengah went to a joint venture between CDL and MCL Land for S$400.3 million or S$603 psf in June 2021. Copen Grand EC, which launched in October 2022, was priced at S$1,300 psf and sold out the following month.
Most recently, an EC site in Tampines was awarded to Sim Lian in October 2023 for S$543 million or S$721 psf ppr – some 2.8 per cent higher than the top bid for the Tengah site tendered on Thursday.
“There is also an upcoming EC site at Jalan Loyang Besar in Pasir Ris which will be launched for tender in May 2024. The last time a plot of land was sold for an EC development in Pasir Ris was in 2012, which may mean that there might be more pent-up demand for ECs there due to the large time gap between EC launches,” said Justin Quek, OrangeTee & Tie’s chief executive officer.
Marcus Chu, CEO of ERA Singapore, expects the latest Plantation Close project to be launched in the fourth quarter of 2025, “aligning with the anticipated global economic recovery in 2025”.
SRI’s Sandrasegeran noted that the average price for new EC launches rose 5.8 per cent from S$1,329 psf in 2022 to S$1,406 psf in 2023. He expects the Plantation Close units to be sold in the range of S$1,400 psf to S$1,500 psf.
https://www.businesstimes.com.sg/property/tengah-ec-parcel-draws-fewer-expected-bids-topped-hoi-hup-sunways-s701-psf-ppr
Feb 01, 2024
https://i.imgur.com/ehGDFi4.jpeg
AN EXECUTIVE condominium (EC) development site at Plantation Close in Tengah garnered fewer-than-expected bids from developers, with the top bid of S$423.4 million or S$701 per square foot per plot ratio (psf ppr) coming from Hoi Hup Realty and Sunway Developments.
The Housing and Development Board tender that closed on Thursday (Feb 1) attracted four bids, when market watchers had anticipated up to eight offers to come in at around S$710 psf.
The Hoi Hup-Sunway joint venture’s bid was 1.6 per cent higher than the next highest offer of S$690 psf ppr from Qingjian Realty and Forsea Residence at S$416.9 million. Hong Leong Holdings and Mitsui Fudosan followed with a bid of S$398.6 million or S$660 psf ppr, while a City Developments Ltd (CDL) subsidiary put in a S$383.8 million offer at S$636 psf ppr.
https://i.imgur.com/kW00MB2.png
“We think a key reason for the moderation in the number of bids for this EC site could be developers’ consideration about the oncoming EC supply at the adjacent plot, which could potentially yield 495 new units,” said Wong Siew Ying, PropNex Realty’s head of research and content.
Thursday’s top bid was just a shade under what Hoi Hup-Sunway paid for the neighbouring site in Plantation Close at a tender in June last year. The earlier site, which saw nine bidders piling in, was sold for S$703 psf ppr, or S$348.5 million.
CBRE pointed to competition from two nearby Bukit Batok West Avenue projects, Altura and Lumina Grand.
“However, the firm pricing continues to reflect developers’ confidence in the EC market, as the segment is generally not as affected by the recent property cooling measures due to the higher proportion of owner-occupiers and first-time buyers,” said Tricia Song, CBRE head of research for Singapore and South-east Asia.
The firm bids showed developers’ continued preference “to play safe by placing bets on upgraders’ market”, and that despite the relatively large size of the project – with 560 units – developers have confidence in its saleability.
“There is also a limited supply of new EC units in the market, and developers are seeking a less risky development site to add to their inventory,” she said.
Huttons Asia’s senior director for data analytics, Lee Sze Teck, noted that there are currently fewer than 500 unsold EC units in the market.
Singapore Realtors Inc’s (SRI) head of research and data analytics, Mohan Sandrasegeran, said: “Hoi Hup Realty and Sunway Developments are solidifying their presence in the Tengah area, marking this location as a focal point of their development strategy, suggesting a deep-seated confidence in the area’s potential.”
Agreeing, JLL’s head of residential research, Chia Siew Chuin, said the bid by the Hoi Hup-Sunway joint venture is “a prudent and defensive strategy to maintain their presence and dilute competition in the vicinity”.
“This move also ensures that they can price the future units in an affordable yet profitable manner,” she said.
Winning the second Plantation Close EC plot would place the developer in a position to strategically synchronise the timing and pricing of the launch of these ECs, said Leonard Tay, Knight Frank Singapore’s head of research.
CBRE’s Song added that the developer could capitalise on economies of scale by amalgamating the sites to form a single mega project of over 1,000 units.
Land prices for EC projects have trended steadily upwards in the last two years, with EC launch prices rising in tandem. While projects marketed in 2022 were about 70 per cent sold at launch and priced around S$1,300 psf, sales appear to have slowed somewhat with the higher prices. The latest EC to come to market – CDL’s Lumina Grand – moved 53 per cent of its units in January 2024 at S$1,464 psf on average.
The first EC site sold in Tengah went to a joint venture between CDL and MCL Land for S$400.3 million or S$603 psf in June 2021. Copen Grand EC, which launched in October 2022, was priced at S$1,300 psf and sold out the following month.
Most recently, an EC site in Tampines was awarded to Sim Lian in October 2023 for S$543 million or S$721 psf ppr – some 2.8 per cent higher than the top bid for the Tengah site tendered on Thursday.
“There is also an upcoming EC site at Jalan Loyang Besar in Pasir Ris which will be launched for tender in May 2024. The last time a plot of land was sold for an EC development in Pasir Ris was in 2012, which may mean that there might be more pent-up demand for ECs there due to the large time gap between EC launches,” said Justin Quek, OrangeTee & Tie’s chief executive officer.
Marcus Chu, CEO of ERA Singapore, expects the latest Plantation Close project to be launched in the fourth quarter of 2025, “aligning with the anticipated global economic recovery in 2025”.
SRI’s Sandrasegeran noted that the average price for new EC launches rose 5.8 per cent from S$1,329 psf in 2022 to S$1,406 psf in 2023. He expects the Plantation Close units to be sold in the range of S$1,400 psf to S$1,500 psf.
https://www.businesstimes.com.sg/property/tengah-ec-parcel-draws-fewer-expected-bids-topped-hoi-hup-sunways-s701-psf-ppr