http://www.businesstimes.com.sg/arch...sures-20130301
Published March 01, 2013
First GLS sites on tender since cooling measures
Response to Kim Tian, Sengkang West sites will indicate developer sentiment
By ong chor hao
THE first Government Land Sales (GLS) sites since the last round of property cooling measures have been put up for sale. And analysts are casting a keen eye on the tender.
The two 99-year leasehold residential sites at Kim Tian Road and Sengkang West Way were released yesterday by the Urban Redevelopment Authority (URA) and the Housing and Development Board (HDB) under the Confirmed List of the GLS programme for the first half of the year. They could yield about 1,100 homes.
"The bids and tender participation rate will give an indication of the sentiment among developers," said Nicholas Mak, SLP International's head of research.
Another analyst, Png Poh Soon, head of research and consultancy at Knight Frank Singapore, said that if prices of land continue to trend upwards, then that would be an early signal to the market that residential homes would not come down so fast.
Even with the latest cooling measures enforced in January, he expected developers to continue to bid for land, either to build up their land bank or to secure attractive sites quickly.
But they will be taking the pulse of homebuyers first through the response to upcoming launches.
"And if the response is not lukewarm and is still strong, then I think that pretty much gives them stronger confidence to enter (to bid)," Mr Png said.
The land parcel at Kim Tian Road, put up for sale by URA, has a maximum gross floor area (GFA) of about 473,000 sq ft and could yield 500 units.
This site should see strong interest due to its prime location near Tiong Bahru MRT station, said Knight Frank's Mr Png, who expected six to eight bids for the site. SLP's Mr Mak foresaws five to 10 bids for the site, which has a maximum gross plot ratio (GPR) of 4.0.
The top bid could be around $870 per sq ft per plot ratio (psf ppr) to $920 psf ppr, for an absolute sum of $411 million to $435 million.
The Sengkang West Way site released by HDB has a maximum GFA of about 536,000 sq ft, and can yield about 555 homes. The land parcel lies along Sungei Punggol and is near Layar and Fernvale LRT stations.
The waterfront location makes it fairly interesting, said Knight Frank's Mr Png, who expected four to six bids.
But competition will not be as fierce as at Tiong Bahru because developers will be more inclined towards "safer bets" such as prime sites near established MRT lines.
SLP's Mr Mak expected the tender for the Sengkang site, with a maximum GPR of 3.0, to fetch top bids of $400 psf ppr to $450 psf ppr, or about $214 million to $241 million, with four to eight bidders.
The tender for the Kim Tian Road plot will close on April 18, while that for the Sengkang West Way plot will close on April 11.
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