http://www.businesstimes.com.sg/arch...grabs-20131217

Published December 17, 2013

Five sites, yielding 3,000 homes, up for grabs

One each in Yishun, Sims Drive and Geylang, 2 in Choa Chu Kang are for ECs

By Mindy Tan [email protected]


[SINGAPORE] Five residential sites, estimated to yield about 3,000 homes, will be launched for sale this month, under the H2 2013 Government Land Sales Programme.

Of this, four were launched for sale yesterday - two executive condominium (EC) sites at Choa Chu Kang Grove, a site at Yishun Ave 9, and a plot at Geylang East Ave 1 that was triggered for sale through the Reserve List system. The fifth site, at Sims Drive, will be launched for sale later this month. All the sites are 99-year leasehold.

Located in Choa Chu Kang, the two adjacent EC sites measure about 177,120 sq ft each, with maximum gross floor area (GFA) of about 619,920 sq ft. They are expected to yield about 575 units each.

Notably, these EC sites are the first to be launched after the latest measures unveiled on Dec 9, which include a cap on the mortgage servicing ratio at 30 per cent of gross monthly income, and the introduction of a resale levy for second-timer applicants who buy EC units directly from developers.

In light of this, sale prices of future EC units could potentially dip to $750 psf compared with projects launched after the introduction of the total debt servicing ratio (TDSR), for which prices hovered around $800 psf, said Ong Kah Seng, director of R'ST Research.

The sites could potentially attract about five bidders each, with an expected top bid of about $330-$370 per sq ft per plot ratio (psf ppr), said Mr Ong, adding that developers will likely be "fairly keen" on the site, given that past EC projects in the vicinity have been well received and that there is strong HDB upgraders' demand.

A developer might even take a leaf out of Kingsford Development's book and acquire both sites, said Mr Ong. "As the profile of bidders is increasingly diverse - including foreign developers who have access to a wider range of project financing - there is a higher tendency for at least one to two developers submitting high bids for one, or both sites," he said.

ERA Realty's key executive officer, Eugene Lim, said that he expected developers to be less bullish, but added that the location was a "welcome change" from the traditional Punggol and Pasir Ris locations.

The tender for both sites will close on Feb 25.

In Yishun, a 221,239 sq ft site was also launched for sale. It has a maximum GFA of about 619,473 sq ft and is expected to yield about 685 units.

Nicholas Mak, executive director at SLP International, said he expects the site to draw between four and eight bids, with a top bid of about $390-$431 psf ppr.

The subject site is interesting as its south-eastern flank borders a canal, which means some of the units could enjoy a water view. On the other hand, it is located opposite two industrial developments, North Point and North View Bizhub. Given that both sites are zoned B1 (for light and clean industries), there should be very little pollution and noise generated from the factories, said Mr Mak.

R'ST Research's Mr Ong expects the site to draw a top bid of $380-$420 psf ppr.

The tender for the site will close on March 11.

The final site to be launched yesterday was a reserve site at Geylang East Ave 1, which was triggered when a developer committed to bid at least $95 million for the parcel. The site measures about 67,146 sq ft, with a permissible GFA of about 188,013 sq ft. Located opposite Geylang East Public Library, it is the smallest of the five released, and is expected to yield about 215 units.

Given its proximity to the MRT track, construction cost is expected to be higher, said SLP's Mr Mak. But compared with the land parcel at Sims Drive - which will be launched for sale on Dec 30 - the site may attract a higher number of bidders including small developers who have no appetite for the big land parcel at Sims Drive.

Consultants said that they expected the top bid to be between $580 and $630 psf ppr. The tender for the site will close on Jan 23.

The site at Sims Drive that will be launched on Dec 30, measures about 257,257 sq ft, with GFA of about 771,772 sq ft. It can yield about 900 units.

"Although this area is considered to be quite central, developers will be cautious as the TDSR limits large loans. . .developers keen on this locality might participate in the Geylang East Ave 1 site instead as it is smaller and the total price to purchase the site and development risks are significantly lower," said Mr Ong.

The closing date for the tender is April 29.

Separately, Minister for National Development Khaw Boon Wan said that the Housing and Development Board will build more two-room flats to enable more singles to own homes, even as it reduces the supply of three-room, four-room and five-room flats, as part of its plans to taper off its construction programme from next year.

This tapering after the ramped-up programme cleared much of the backlog from family applicants, particularly first-timer applications, which dropped from 2.4 in January to 1.3 last month, Mr Khaw noted on his blog yesterday. Second-timer application rates have fallen from 14.9 in January to 2.7 last month.

More two-room flats will be built, and a steady stream of studio apartments will continue to be pushed out for singles and seniors looking to right-size.

Application rates for singles was 27.1 in the November BTO launch, compared with 57.5 in the July BTO launch. Application rates for studio apartments have also stabilised at an average of 2.1 this year, and the final take-up was less than 70 per cent for the first six months.