Having had its maiden collective sales attempt stymied by the introduction of the total debt servicing ratio (TDSR) framework, Eunosville is back on the market for a second run. Accompanying it is Jervois Gardens, which was also launched for collective sale by tender Monday.
The 330-unit Eunosville, located opposite Eunos MRT Station, is being put on the market for a minimum price of $688 million, similar to its initial collective sale attempt in June.
Including estimated differential premiums of $163 million payable to top up the site's lease from a balance term of around 74 years to 99 years, and intensification of use (subject to approval from the relevant authorities), this translates to about $806 per square foot per plot ratio (psf ppr) on the potential gross floor area (GFA), said Jones Lang LaSalle, the project's sole marketing agent. It added that the higher estimated differential premium this time is due to the increase in development charge rates from Sept 1.
"When the tender closed in August, we received written expressions of interest from three large developers who found the site attractive on many counts, in particular having an MRT station at its doorstep. But as this was shortly after the introduction of TDSR, they asked for more time to assess the market, given that it entails commitment to a large-scale project," said Karamjit Singh, head of investments and residential at Jones Lang LaSalle (JLL).
Eunosville was built in the late 1980s by the former Housing and Urban Development Company (HUDC), and was subsequently privatised in 2011. It has a land area of about 376,712 sq ft and is zoned "residential", with a gross plot ratio of 2.8 under the Master Plan 2008 and Draft Master Plan 2013. The site could potentially yield 1,000 units with an average size of 1,100 sq ft.
Mr Singh said developers have the option of dividing the plot into two or more parcels, and can expect to sell new units at $1,400-1,550 psf, based on an estimated break-even price of about $1,200 psf. Homeowners can expect to receive sales proceeds of more than $2 million each, based on the minimum asking price.
Meanwhile, Jervois Gardens, a freehold residential project, is going on the market with an asking price of about $72 million.
This works out to about $1,510 psf ppr assuming no development charge payable, and subject to baseline confirmation. If the developer chooses to include the additional 10 per cent GFA allowed for balcony space, this works out to about $1,374 psf ppr, said Colliers International.
Measuring about 34,038 sq ft, the site has a plot ratio of 1.4, and can be developed into a five-storey development comprising about 65 apartment units of 800 sq ft each, subject to approval by the relevant authorities.
"This small freehold site offers developers a quick turnaround time. Coupled with the excellent location, the site offers many opportunities and investment potential for the successful bidder," said Tang Wei Leng, executive director of investment services at Colliers International,
Selling prices of the nearby RV Residences, RV Edge and The Montana are in the region of $1,900-2,250 psf, while new launches, such as leasehold developments Mon Jervois and Echelon, also achieved selling prices as high as $2,474 psf, she noted.
Said Mr Singh: "The market is adjusting to life post-TDSR. We see it beginning to find its footing at a price point that is a notch below pre-TDSR levels, with the likelihood of stability thereafter especially in the premium mass-market sector.
"This is backed by high liquidity and savings, continued increase in population, albeit at a slower pace, and a lack of attractive alternative investments for many households. Consequently, specific projects that are priced sensitively and enjoy unique selling points will continue to sell well. This was clearly evident in the case of Duo Residences and Alex Residences," he added.
The number of bidders in the latest tenders for Government Land Sale (GLS) sites has been healthy, with eight or nine bidders vying for adjoining residential sites at Upper Serangoon View and Mount Sophia. Even the top bid prices displayed confidence in the broader residential market, Mr Singh said.
The tender for Eunosville closes on Jan 14 at 2.30pm while that for Jervois Gardens will close on Jan 22 at 3pm.
Get The Business Times for more stories.