Government Land Sales at Yishun Avenue 9 and Tanah Merah Kechil attract Bidders

Yishun Site

Closed yesterday with tenders for the first six months of the year for two confirmed residential areas under the GLS scheme.

The first GLS tenders to close after the pandemic started are the leasehold land site in Yishun Avenue 9 and Tanah Merah Kechil link provided for sale by URA and the Housing Board (HDB), respectively.

After the offers for both sites have been reviewed, a judgment on the award of the tenders will be taken. In the midst of the slump, the proposals were normally beyond estimates, experts claim.

Next to Tanah Merah MRT station, the 8,880 sq m site at Tanah Merah Kechil Connection attracted 15 offers, with the largest at $248.99 million from MCC Land (Singapore). Analysts said this corresponds to a land cost of around $930 per sq ft per plot ratio (psf ppr).

This reflects the largest number of offers since the commercial and residential site tender for Holland Road in May 2018, which attracted 15 bids from 10 consortiums, noted Tricia Song, head of research for Singapore at Colliers International.

It is also far higher than the four to nine offers over the past 18 months seen for private residential government land sales locations, she added.

Yishun Avenue 9’s 21,514 sq m executive condominium (EC) site earned Sing Holdings’ top offer at $373.5 million (or a site rate of $576 psf ppr), out of a total of seven bids received by the HDB.

Mr. Karamjit Singh, Showsuite Consultancy Chief Executive, observed that both sites are aimed at the mass sector, where demand for homes remains the highest.

“The developer will need the highest offer for the Tanah Merah site to launch the new condo for $1,700 psf to $1,800 psf, which is bullish as new units are selling between $1,500 psf and $1,600 psf in that location,” he said.

Mr. Ong Teck Hui, JLL’s senior director of analysis and consulting, said its proximity to Tanah Merah MRT station and its comparatively limited plot area, needing less capital outlay, are the main attractions of the property.

In Q3, private home prices in Singapore increased by 0.8% in the middle of a contraction. “Tanah Merah Kechil Link’s residential construction is likely to be launched in late 2021, as buying demand could increase alongside an anticipated economic recovery,” he said.

Around 265 units and 2,000 sq m of commercial space will theoretically be created by the Tanah Merah Kechil Connection location, which is slated for residential with commercial usage on the first floor.

As nearby facilities are minimal, the provision for commercial space is enticing, said Ms Wong Siew Ying, head of research and content for PropNex.

Because of the pandemic, the Yishun EC site was granted an expanded public tender duration of six months. Tender durations are usually six to eight weeks for residential sites under the GLS scheme.

The EC site will yield approximately 600 homes and is a new mall near Junction 9.

Nicholas Mak, head of analysis and consulting at ERA Realty, observed that the Yishun EC site ‘s top offer “shows that the developer is very optimistic since the land cost is higher than the two EC sites introduced for sale in 2019.”

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“The projected break-even expense at the land rate of $576 psf ppr is around $1,000 psf to $1,050 psf. The developer is possibly preparing to introduce new units at rates over $1,100 psf,” he said.

Trust may also have been enhanced by the steady sales of the executive condominium at Piermont Grand, which is 76% sold at a median price of over $1,100 psf, as well as the absence of local ECs over the past six years, Ms. Song noted.

The location of Yishun Avenue 9 is situated on the outskirts of the town of Yishun, about 2 km from Yishun MRT station.

It is the newest local EC location to be offered under the GLS program since 2014 … so there may be some pent-up interest, “said Ms Song.”

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