Bids for 3 EC sites to close on same day

Bids for 3 EC sites to close on same day
PHOTO: Bids for 3 EC sites to close on same day

SINGAPORE - In a move to moderate tender bids and future property prices, the tender for three sites will close on the same day for the first time.

Included in this exercise is an executive condominium (EC) site at Punggol Central, one of the four sites released as part of the Government Land Sales Programme for the first half of 2013.

The other two EC sites whose tender closes on July 30 are in Punggol Drive and Yuan Ching Road.

The Punggol Central plot, which is about 146,010 sq ft, has a maximum building height of 64 metres above mean sea level (AMSL). Maximum gross floor area (GFA) for the site is about 438,030 sq ft. It will be launched for sale on April 29 and is expected to yield about 395 homes.

The Punggol Drive and Yuan Ching Road plots will be launched in June.

The idea to offer multiple sites for sale at around the same time was flagged as a possibility by the Urban Redevelopment Authority's (URA) earlier this year.

In a statement released on Monday, the Housing and Development Board (HDB) said the move to close the tenders on the same day was initiated in response to feedback from the public and real estate industry that this could help moderate tender bids and future property prices.

DWG's senior manager of training, research and consultancy, Lee Sze Teck, said that while the number of participating bidders might moderate, bid prices might not necessarily be lower.

Instead, the government should launch and close tenders for sites in the same area on the same day, suggested Mr Lee.

"For example, the sites at Anchorvale Crescent and Fernvale Close, both of which are in Sengkang, can have the same closing date," said Mr Lee.

"If one of the bids is too high, the price at which the project can be launched will be curtailed by the other site which was sold at a lower price. In this way, developers will be cautious about bidding.

"But the downside of this is that developers with greater financial muscle could make a clean sweep of the sites and achieve certain pricing power in the area."

Nicholas Mak, executive director, research and consultancy, at SLP International Property Consultants, warned that lower land prices does not necessarily lead to lower housing prices.

"The developer that managed to acquire the land at a relatively low price will still launch the new development at the market rate at the time of the launch. Therefore if the government's objective is to ensure lower EC prices ... the government would have to supplement this new initiative with other measures," said Mr Mak.

Lee Lay Keng, DTZ's head of Singapore Research, was of the view that this could moderate tender bids as "there could be fewer bidders for each site as developers will have to weigh the different options and put in a bid for their most preferred choice."

The second EC site, which is located at Anchorvale Crescent, is about 247,570 sq ft which translates to 742,709 sq ft GFA. The site has a maximum building height of 64 metres AMSL, and is expected to yield about 690 units. Closing date for the tender is May 30.

DWG's Mr Lee said he expects the two sites to see an estimated bid price of $300-$350 per square foot per plot ratio (psf ppr).

Ong Kah Seng, director of R'ST Research, said he expects an average of five bids per plot, in the range of $300-$340 psf ppr.

Separately, the 162,808 sq ft residential site at Faber Walk is expected to yield about 210 units. It has maximum GFA of 227,936 sq ft, and has a maximum building height of five storeys. Closing date for the tender is June 18.

Christine Li, head of research and consultancy at Orange Tee said of the four sites, this is the most attractive due to its exclusivity.

"Even though it's a low-rise apartment, residents can still enjoy unblocked views of its surroundings," she noted. She expects the top bid to be about $480 psf ppr.

The final residential site at Fernvale Close sits on a plot of about 160,710 sq ft, which translates to a maximum GFA of about 482,131 sq ft. It has maximum building height of 80m AMSL, and is expected to yield about 495 homes. Closing date for the tender is June 13.

Said SLP's Mr Mak: "The site at Fernvale Close is the most attractive one as it offers a wide frontage of the Punggol River. A realistic valuation for this site is about $450-$470 psf ppr. But in the current market sentiment, it is not surprising for the top bid to range from $500-$520 psf ppr."

DWG's Mr Lee said he expects top bids for the two residential sites to be in the range of $450-$500 psf ppr.

The EC site at Anchorvale Crescent and two residential plots at Fernvale Close and Faber Walk were launched for sale on Monday.


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