[url]http://www.businesstimes.com.sg/real-estate/unveiled-first-government-land-sales-under-new-bca-rules[/url]

[B][SIZE=5]Unveiled: first government land sales under new BCA rules[/SIZE][/B]

By Lynette Khoo

[email][email protected][/email]@LynetteKhooBT

7 Nov


WITH new rules to raise productivity in the construction sector kicking in on Nov 1, the first government land sale (GLS) site to come under the new requirements is an Upper Serangoon Road plot. Two other GLS sites - at Yishun Avenue 4 and Jurong West Street 41 - are also selected for prefabricated pre-finished volumetric construction (PPVC), on top of meeting the new requirements.

The Building and Construction Authority (BCA) said it works closely with other agencies to select suitable GLS sites for PPVC, which involves assembling whole rooms or apartment units that are manufactured off-site. Selection factors would include the number of residential units for economies of scale, the surrounding road access and traffic volume, it said.

From Nov 1, projects built on GLS sites have to meet higher building design and constructability standards. Developers who bid for GLS sites will also have to meet a certain level of prefabrication, such as using drywall as internal partitions in residential sites.
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For selected sites, developers have to adopt productive technologies, including PPVC for hotels and residential projects, and cross-laminated timber for low and medium-rise buildings. Residential sites are required to use prefabricated bathroom units, while industrial sites need to meet a minimum level of prefabrication.

To give prospective tenderers of the 99-year leasehold site at Upper Serangoon Road more time to factor the new requirements into their bids, the URA said on Thursday that it is extending the tender closing date to Nov 27 from Nov 13. The roughly 10,000-square-metre plot is expected to yield 340 homes, with commercial units on the first floor.

Property consultants were earlier expecting about 10 bidders for the site, with a winning bid of between S$650 and S$750 per square foot per plot ratio (psf ppr), based on previous reports. The implementation of the new requirements, however, is widely expected to translate into higher costs in the short term.

R'ST Research director Ong Kah Seng now expects the top bid to be S$600-650 psf ppr, down from his earlier forecast of S$620-650 psf ppr, as he believes developers will factor in rising construction costs and higher development risks. He reckons that those developers who are also contractors would have more confidence in estimating construction costs.

SLP International executive director Nicholas Mak noted that the increase in the demand for prefabricated parts could mean higher costs for his company since the number of pre-fabrication factories is limited in the short term.

"As a result, the increase in construction cost can either lead to a fall in GLS land tender prices or an increase in future property prices. Land tender prices are unlikely to fall if the GLS land sites are considered attractive by developers."