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Thread: Two sites up for tender to yield 1,160 homes

  1. #1
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    Default Two sites up for tender to yield 1,160 homes

    Two sites up for tender to yield 1,160 homes

    Landed site in Hougang set to see keen interest from small- to mid-sized players

    Friday, April 21, 2017

    by Lynette Khoo


    A PLUM landed plot in Hougang at Lorong 1 Realty Park and a large non-landed site at Stirling Road have been launched for sale, with consultants expecting keen demand for both.

    The plot in Hougang, which can yield 50 landed homes, is expected to be a bigger draw for small- and mid-sized developers, market watchers said.

    Developers can choose to build conventional landed housing or strata-landed housing on the 1.34 ha site in the mature landed enclave of Hougang. The 99-year leasehold site is on the Confirmed List of the Government Land Sales (GLS) programme.

    The Stirling Road land parcel is a Reserve List site that was triggered for sale last week after a developer committed to bid at no less than S$685.25 million or S$718 per square foot per plot ratio (psf ppr). But it is likely to deter smaller players given its size - it can yield an estimated 1,110 units.

    Based on projections by property consultants, the Lorong 1 Realty Park site may draw a top bid in the region S$420-580 psf. They are now expecting the top bid for site at Stirling Road to draw six to 14 bids with the top bid coming in at S$780-1,000 psf.

    JLL head of Singapore research and consultancy Tay Huey Ying said the site at Lorong 1 Realty Park might see a better turnout given its more palatable price quantum, its location within the mature Upper Serangoon area and, most importantly, the dearth of sites for landed development.

    The last time a landed site was sold under the GLS programme was in June 2013, when the Victoria Park Villas parcel was awarded after being hotly contested by 12 bidders, she recalled.

    Concurring, SLP International executive director Nicholas Mak said he is expecting this sole landed housing development site in the H1 2017 GLS programme "to be fiercely fought over".

    "There is a significant number of small- and medium-sized developers and contractor-developers who are hungry for suitable development sites," he said, adding that he's expecting as many as 25 to 32 bids.

    "The site's positive attributes, such as its location within a landed enclave and its proximity to the Hougang MRT Station, would also attract much interest from developers."

    According to CBRE Research estimates, 99-year leasehold terrace houses in the neighbourhood are currently transacted in the resale market at S$1.5-2 million.

    Notwithstanding strong locational attributes, the Stirling Road site may be confined to bidders with the financial muscle and risk appetite.

    Cushman & Wakefield research director Christine Li said this is due to the requirement to sell out all units within five years from the date of land purchase in order to meet the conditions for remission on additional buyers' stamp duty.

    "This could mean that even though developers are keen, they might have to form consortium in order to take on the site," she said.

    JLL estimates that there are currently more than 1,500 unsold units in nearby launched and yet-to-be-launched projects including unsold units at Commonwealth Tower, Queens Peak, Alex Residences, soon-to-be launched Artra and a project in Margaret Drive.

  2. #2
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    Default Keen competition expected for two residential sites

    Keen competition expected for two residential sites

    Apr 21, 2017

    Wong Siew Ying


    A scramble by developers to build up their land banks amid better buying sentiment is likely to spark a fierce contest for two private residential sites launched for sale by public tender yesterday, analysts said.

    The two 99-year leasehold plots could yield 1,160 private homes.

    One site offered by the Urban Redevelopment Authority (URA) is in Lorong 1 Realty Park in Hougang and earmarked for landed housing. The other in Stirling Road in Queenstown is for a large condominium and was launched after being triggered for sale last week.

    "I expect competitive bidding for these two sites... Land-banking would probably be more urgent for developers who have not won any sites in the past two years, and/or have progressively sold their current stock," noted Ms Tricia Song, research head at Colliers International Singapore.

    The Lorong 1 Realty Park plot spans nearly 13,400 sq m and is within an established residential area in Hougang. The URA said about 50 landed homes of up to three storeys could be built there.

    Mr Nicholas Mak, head of research at SLP International Property Consultants, expects the site to be "fiercely fought over".

    "There is a significant number of small and medium-sized developers and contractor-developers who are hungry for suitable development sites," he added.

    Analysts have varying views on the likely number of bidders - from 10 to 32. The top bid could range from $58 million ($400 psf on land area) to as much as $82.2 million ($570 psf on land area.)

    Its popularity rests on the fairly small plot size and the dearth of sites for landed development.

    The Hougang site has been released for sale via the confirmed list of the Government Land Sales (GLS) Programme for this half year.

    Analysts expect the Queenstown site to see slightly more restrained bidding - eight to 12 bids - despite being in a popular mature estate and near the MRT station.

    "The project with an estimated dwelling unit of 1,110 is huge and could deter some developers from bidding for it due to the ABSD (additional buyer's stamp duty) remission deadline of five years," said Ms Christine Li, research director at Cushman & Wakefield.

    Under the ABSD rules, developers must build and sell all units in residential projects within five years of buying the site, or have to pay a 15 per cent levy on the site's purchase price plus 5 per cent interest.

    Given the large project size, CBRE Research believes developers may form joint ventures to take on the site to spread development risk.

    Ms Song estimates that the top bid could come in at $811 million to $907 million ($850-$950 psf per plot ratio), while Ms Li puts it at $860 million to $950 million ($900-$1,000 psf ppr).

    The 21,109.5 sq m Stirling Road plot has been on the GLS reserve list since March 2010. It was triggered last week by an application from a developer who committed to bid at least $685.25 million - a figure deemed acceptable to the Government.





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