Bugis’ rejuvenation will deepen with two rare residential Government Land Sales (GLS) sites there launched for sale on Friday, and analysts believe the area’s potential will draw keen developer interest.
The location of these two plots within the Central Area also makes them unencumbered from the recently revised development control guidelines, which pare down the maximum number of units allowable for the two other GLS sites launched on Friday at Geylang and Dairy Farm.
One of the Bugis sites is on Middle Road and has been launched under the Confirmed List. Spanning about 80,300 sq ft, the site which is zoned residential with commercial at the first storey can yield an estimated 375 homes (see amendment note). There are two zones: the low-rise zone which can go up to six storeys, and a high-rise zone which can go up to 20 storeys.
Just a stone’s throw away is a site on Tan Quee Lan Street, launched under the Reserve List. The site is about 124,100 sq ft, also zoned residential with commercial at the first storey, and can yield about 580 homes.
It has two zones with two height limits: one at up to 30 storeys, the other at up to six storeys.
“Both sites will supplement the housing demand in the rapid transformation of the Beach Road commercial enclave,” said Tricia Song, head of research for Singapore at Colliers International.
She noted that nearby developments, like the upcoming Guoco Midtown, Parkview Square, DUO and Bugis Junction, take up over 2.5 million sq ft of prime grade office and retail space.
She predicted a top bid of S$1,400 per square foot per plot ratio (psf ppr), which translates to a land bid of about S$475 million for the Middle Road site.
If triggered, she said the Tan Quee Lan Street plot could get a higher top bid of S$1,500 psf ppr, which translates to a land bid of S$780 million on the basis of it being above the Bugis MRT interchange.
Nearby, DUO Residences has already sold 655 units of its 660 units since its launch in 2013, achieving an average selling price of S$2,036 psf, she said.
“(The sites are) sandwiched between the Bugis planning area which is bustling with retail amenities and tourist attractions, and the City Hall-Suntec City locality which is one of the business district precincts,” Nicholas Mak, executive director for ZACD Group, said.
He thinks the price for the Tan Quee Lan Street land parcel could come in at S$1,350 to S$1,550 psf ppr, slightly edging out the S$1,300 to S$1,500 psf he predicts for the Middle Road one.
However, another analyst pointed out developers may find it harder to swallow the large quantums for these sites, in the post property cooling measures era.
Lee Nai Jia, senior director and head of research at Knight Frank, said: “Developers are looking at it. They are a bit more cautious now but they see the potential in the area and so they are willing to compete.”
He predicts a S$1,300 to S$1,400 sq ft winning bid for both sites, and fewer than eight developers to bid for them.
Analysts were generally cooler on two other sites, both zoned residential, launched yesterday.
One, on the Confirmed List, is at Sims Drive in Geylang. Spanning 174,600 sq ft, it can yield an estimated 570 housing units. This is down from the previously announced estimate of 650 units, as the site will be subject to a larger minimum average unit size of 85 sq m than previously (70 sq m).
This site was carried forward from the GLS programme in the first half of the year.
Mr Mak of ZACD Group expects a reasonable top bid in the tender for this site to range from S$471 million to S$524 million, or S$900 to S$1,000 psf ppr, below the S$1,109 psf ppr land rate at a Mattar Road GLS site in April this year.
“Given the fact that this subject site at Sims Drive is further from the MRT station and near the PIE expressway which means it would be affected by traffic noise, this site would be priced less competitively,” he said.
Mr Lee of Knight Frank pointed to the large number of upcoming city-fringe projects and said that will weigh on the minds of developers.
Next door is Sims Urban Oasis, which has seen nearly all of its 1,024 units sold as at October 2018, at an average selling price of S$1,400 psf since its launch in February 2015, Ms Song noted.
For the 168,600 sq ft Dairy Farm Walk site, analysts do not expect it to be triggered from the Reserve List anytime soon.
If it were, they generally expect lower pricing compared to a GLS site next door which was awarded to United Engineers in September for S$368.8 million, or S$830 psf ppr.
Just five bidders took part. “Developers are unlikely to pile in within the short time frame,” Ms Song noted, though the site could still attract a niche player.
A reasonable top bid for this site could range from S$750 psf ppr to S$800 psf ppr, Mr Mak said.
Knight Frank’s Mr Lee said of the two non-central locations: “Were I a developer thinking of where to put my resources, I’d still put it in the Bugis sites.”
The two Confirmed List tenders for the Middle Road and Sims Drive sites will close on March 28.
The tenders for Tan Quee Lan Street and Dairy Farm Walk sites can be triggered by a developer submitting an application with a minimum purchase price that is acceptable to the state.
Rounding off the second half 2018 GLS programme will be the Woodlands Square/Woodlands Avenue white site, to be launched for sale under the Reserve List in December.