Sim Lian Sets New Record for EC Land with S$768 psf ppr top bid for Tampines site

Developer’s S$465 million offer tops four other bids in strong showing for executive condo land sale

October 24, 2024

CONDOsingapore.com



An executive condominium (EC) site in Tampines Street 95 has drawn strong interest from developers, with Sim Lian Group setting a new benchmark for EC land prices with its winning bid of S$768 per square foot per plot ratio (psf ppr).

The Housing and Development Board (HDB) tender, which closed on Thursday (Oct 24), attracted five bids. Sim Lian’s offer of S$465 million surpassed market expectations, which had projected bids to range between S$650 and S$730 psf ppr.

The robust competition underscores developers’ confidence in EC projects as a reliable investment in an uncertain market, said Nicholas Mak, chief research officer at Mogul.sg. “Developers see EC projects as a sure thing, given their lower risk profile and strong demand from buyers,” he noted.

Eugene Lim, key executive officer at ERA Singapore, echoed this sentiment, stating, “EC sites are generally lower-risk for developers due to their affordable development costs and high demand from buyers seeking competitively priced homes compared to private condominiums.”

Sim Lian’s bid of S$768 psf ppr was1.6 per cent higher than the next highest offer of S$756 psf ppr from a consortium comprising Santarli Construction, Apex Asia, construction group Kay Lim Realty and Heeton Holdings.

Other bids included S$439.6 million or S$726 psf ppr from Sing Holdings, S$438.8 million or S$725 psf ppr from Chinese developer CSCLand, and S$425.7 million or S$703 psf ppr from a joint venture between Hong Leong Holdings’ Intrepid Investments and TID Residential.



If awarded the tender, this would mark Sim Lian’s third EC project in Tampines. The developer is currently building the 760-unit Aurelle of Tampines on a site in Tampines Street 62, acquired last October and slated for launch in the first half of 2025. Sim Lian also developed The Tampines Trilliant in Tampines Central, completed in 2015, and has delivered EC projects in Choa Chu Kang and Anchorvale.

PropNex’s head of research and content, Wong Siew Ying, described Sim Lian’s aggressive bid as a strategic move to solidify its market presence. “By securing this site, Sim Lian can effectively dominate the EC market in Tampines for the next two to three years, minimizing competition and setting pricing benchmarks for its projects,” she said.

Nicholas Mak added that this strategy allows Sim Lian to control pricing for its EC projects in Tampines without the risk of being undercut by competitors, enhancing its profitability and market influence until the government releases another EC site in the area.

Pricing and Market Outlook

Analysts estimate that the new EC project in Tampines could be priced between S$1,500 and S$1,750 psf, based on the winning bid of S$768 psf ppr. With a 15-month waiting period from land acquisition to launch, the project is expected to hit the market in 2026.

Justin Quek, CEO of OrangeTee & Tie, noted that the timing of the launch could work in Sim Lian’s favor, as there will be limited competing projects to divert buyer interest. “The gap between launches should help ensure sufficient demand,” he said.

Sim Lian’s bid of S$768 psf ppr is 5.1 per cent higher than the Jalan Loyang Besar EC site in Pasir Ris, awarded in August to a joint venture between CNQC International, China Communications Construction Company, and ZACD.

ERA’s Eugene Lim suggested that recent interest rate cuts may have bolstered developers’ confidence, contributing to the strong bidding. EC land prices have been on an upward trend, with Qingjian’s S$729 psf ppr bid for the Jalan Loyang Besar site in August slightly exceeding Sim Lian’s S$721 psf ppr offer for the Tampines Street 62 plot last October.

PropNex’s Wong highlighted the affordability of ECs compared to private condominiums, with median EC prices at $1,500 psf versus S$2,145 psf for new mass-market condos in the suburbs. As of September 2024, only 171 unsold new EC units remain on the market, primarily in Bukit Batok and Yishun.

Site Details and Nearby Developments

The Tampines Street 95 site spans 22,488.9 square meters (sq m) and has a maximum gross floor area of 56,223 sq m, allowing for the development of approximately 560 housing units. Located near Tampines West MRT station, the site is also close to an upcoming mixed-use development awarded to Hoi Hup-Sunway earlier this month for S$668.3 million or S$1,004 psf ppr.

The last EC project launched in Tampines, Tenet—a joint development by Qingjian Realty, Santarli, and Heeton—is nearly sold out, with only one unit remaining as of October 2024.

In Bukit Batok, City Developments’ Lumina Grand EC, launched in January 2024, has sold 83% of its 512 units. The next EC project expected to launch is Novo Place in Tengah, developed by a joint venture between Hoi Hup Realty and Sunway Developments, which secured the site for S$423.2 million (S$701 psf ppr) in February.

With strong demand for ECs and limited supply, Sim Lian’s latest bid reflects its confidence in the sustained appeal of EC projects among Singaporean homebuyers.