Sengkang EC site draws land-hungry developers

Land-hungry residential developers made a beeline for an executive condominium (EC) site in Anchorvale Lane, Sengkang, on Tuesday. The site drew 16 bids, a whopping turnout not seen for an EC site since July 2013.

The top bid of S$355.07 per square foot per plot ratio (psf ppr) from a Hoi Hup Realty-Sunway Developments tie-up exceeded all expectations and is the highest offer for an EC site since a Choa Chu Kang Drive plot (coming up as Wandervale) fetched S$361 psf ppr in September 2014.

ECs are a public-private housing hybrid form with initial buyer eligibility and resale restrictions that are lifted a decade after project completion.

JLL national director Ong Teck Hui said: “The top bidders seem to be counting on the current EC glut being steadily soaked up in the next 15 months, which will be the earliest when the top bidder, Hoi Hup, can launch the new project on the Anchorvale Lane site under current rules.”

Competition was also fuelled by the plot being the only EC site on this year’s confirmed list of the Government Land Sales (GLS) Programme.

“Developers’ interest,” said Desmond Sim, CBRE Research head of Singapore and South-East Asia, “was also fanned by the recent sales performance of Treasure Crest.”

Treasure Crest, which is in the vicinity, sold like hot cakes in July, with nearly 72 per cent or 362 of its 504 units snapped up in the first weekend. To date, developer Sim Lian has moved close to 85 per cent of the project, at an average price of S$742 psf.

SLP International executive director Nicholas Mak noted that the top bid for the latest tender surpassed the S$280 psf ppr that Sim Lian paid for the Treasure Crest site (along Anchorvale Crescent) in January 2015 by 26.8 per cent.

This is despite the Anchorvale Lane site being in a less favourable location. Moreover, the Anchorvale Crescent site drew just three bids.

Mr Mak concluded: “The higher land price and stronger participation rate among developers at Tuesday’s tender indicate improved market sentiments in the EC development segment.”

This outcome is likely to lead to the authorities increasing the number of EC sites on the confirmed list of the next GLS Programme, he added.

When the Anchorvale Lane plot was launched in late-June, property consultants had generally expected the top bid to come in at S$290-295 psf ppr. Ten of the 16 bids at the latest tender exceeded S$300 psf ppr.

When contacted, Hoi Hup director Wong Sjew Hung said that the strong take-up for Treasure Crest boosted the confidence of most bidders. “We really like this site, which is next to Punggol Reservoir and near Sengkang Riverside Park. It’s in a green, tranquil area.”

Analysts noted that the site is between Layar and Tongkang LRT stations. Tongkang Station is two stops from Sengkang MRT Station, bus interchange and the Compass One mall. That said, the Treasure Crest site is close to Cheng Lim LRT Station, just one stop from Sengkang MRT Station.

Ms Wong told The Business Times that Hoi Hup’s bid would translate to a breakeven cost of about S$685 psf and that the group is eyeing an average selling price of S$755-760 psf when the project is launched late next year. The proposed scheme comprises 640 apartments in 10 blocks. The 17-storey project will comprise mostly three-bedders, with some four and five-bedroom units.

Also noteworthy is that Hoi Hup clinched the previous EC site tendered – in the Hougang/Yio Chu Kang area – in February this year. Ms Wong said that the plan is to launch the 531-unit project around June 2017.

For the Anchorvale Lane site tender, Hoi Hup’s top bid was 2.5 per cent higher than the S$346.30 psf ppr from Wee Hur Development. Robert Kuok’s Allgreen Properties was the third-highest, at S$334.37 psf ppr.

Other bidders included a tie-up between Sing Holdings and Maxdin (S$333.48 psf ppr); Kheng Leong in partnership with Singland Homes (S$331.71 psf ppr); and Sim Lian Land (S$328.62 psf ppr). Also at the tender were Qingjian Realty; China Construction (S$313 psf ppr); and Nanshan Group Singapore (S$307 psf ppr).

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