URA, HDB release Ang Mo Kio condo plot and Tengah EC site

Strong turnout of bidders expected for both tenders given improved market sentiment, developer confidence

Fri, Nov 27, 2020


THE Urban Redevelopment Authority (URA) and the Housing & Development Board (HDB) on Thursday released two residential land parcels under the second half of the 2020 government land sales (GLS) programme, and analysts are expecting keen bidding from developers.

The URA site at Ang Mo Kio Avenue 1 and the HDB executive condominium (EC) site at Tengah Garden Walk were launched for sale under the confirmed list.

Confirmed list sites are launched according to schedule regardless of demand, while a site on the reserve list is put up for tender when a developer makes an offer acceptable to the government.

Wong Siew Ying, PropNex's head of research and content, said: "Given the much-improved market sentiment, developers' confidence has returned and along with that, their appetite for land acquisition."

"Going by the outcome of the recent GLS (of the sites at Tanah Merah Kechil Link and Yishun Avenue 9 EC), we would similarly expect a relatively strong turnout of bidders," she said.

Taken together, the two sites with a lease period of 99 years each, and can yield about 985 residential units, though the actual number of dwelling units provided by the developer may vary, URA and HDB said in a press statement.

The Ang Mo Kio land parcel which is estimated to yield 370 units, has a site area of about 12,679 square metres (sq m), and a maximum gross floor area (GFA) of 31,699 sq m.

The maximum building height is four storeys in the low-rise zone and 103 metres Singapore height datum (SHD) in the high-rise zone.

PropNex's Ms Wong expects demand for the Ang Mo Kio site to be buoyant, with more than 10 bidders.

Noting that the plot is the latest GLS site to be offered in that area in six years, she projects that the top bid could come in at S$273 million to S$290 million, or about S$800 to S$850 per square foot per plot ratio (psf/pr).

JLL's senior director of research & consultancy, Ong Teck Hui, expects eight to 12 parties contesting for the plot, which could fetch a top bid of between S$950 to S$1,000 psf/pr.

He noted that the site is a short distance from the future Mayflower Mass Rapid Transit (MRT) station and opposite the Bishan-Ang Mo Kio park.

It is also located within one kilometre from primary schools such as Ai Tong School, CHIJ St Nicholas Girls' School and Mayflower Primary School.

Noted Mr Ong: "Given its palatable development quantum which is less risky and its strong locational attributes, the subject site might be appealing to more developers, including the mid-sized players."

"By the time tender closes in May 2021, unsold inventory would have reduced further, while market conditions are expected to be better due to the economic recovery," he added.

Likewise, ERA Realty's head of research and consultancy, Nicholas Mak, believes that tender for the Ang Mo Kio site could draw eight to 12 bids.

He noted that the site is designated for condominium development and that the top bid could range between S$303 million and S$313.9 million, which translate to a land rate of S$890 to S$920 psf/pr.

The second land parcel at Tengah has a site area of about 22,021 sq m and a maximum GFA of 61,659 sq m.

It is expected to yield 615 EC units, and has a maximum building height of 60 metres SHD.

ERA's Mr Mak noted that this will be the first EC housing project in Tengah town.

He added that upcoming MRT stations Hong Kah and Tengah Plantation on the new Jurong Regional Line will be about 600 m from the site.

He believes that the plot could garner six to nine bids, with the top bid varying from S$331.8 million to S$352 million, or S$500 to S$530 psf/pr.

"Just recently on Nov 20, the tender for Yishun Avenue 9 EC site was awarded to Sing Holdings at the land rate of S$576 psf/pr," he noted.

"Experienced developers who contested in the previous EC land tender such as City Developments Limited, CSC Land Group or CEL Development are likely to participate in this tender again."

PropNex's Ms Wong anticipates that the site could draw five to seven bids, with the top bid likely to range around S$345 million to S$365 million, or about S$520 to S$550 psf/pr.

She said: "Despite being in an untested location, the government's plans to transform Tengah into a smart and sustainable town, with green features and smart technologies, should make this site appealing to developers."

"In addition, the emerging Jurong Innovation District advanced manufacturing hub in the West would also help to attract investments and create jobs in the area," she noted.

While the site at Tengah is in a relatively less developed area, it could also offer first-mover advantage to the successful bidder, said JLL's Mr Ong. He noted that the last time an EC site was sold in the nearby Choa Chu Kang area was the sale of the Sol Acres parcels in March 2014.

He expects the site to be contested by six to nine bidders, with the top bid ranging between S$530 to S$580 psf/pr.

"Developers are likely to view the EC market favourably, as there are only four EC projects in the launch pipeline, while demand could pick up under better market conditions next year," he said.

In view of the current Covid-19 situation, URA and HDB will offer a longer tender period of six months to provide developers with additional time for assessment.

Tender for the two land parcels will close at noon on May 25, 2021.