A land parcel at Tanah Merah Kechil Link, slated for residential with commercial use on the first storey, is now up for sale by public tender.
The Urban Redevelopment Authority (URA) launched the tender on Thursday, under the confirmed list of the first half 2020 government land sales (GLS) programme.
The site can potentially yield about 265 residential units and has a lease period of 99 years. It has a site area of 8,880 square metres (sq m) and a maximum gross floor area (GFA) of 24,864 sq m.
The maximum building height is 49 metres to 55 metres above the mean sea level. This translates to about 13 to 16 floors, depending on the design of the building, Nicholas Mak, head of research and consultancy at ERA Realty, told The Business Times on Thursday.
The land parcel can be developed into an estimated 265 dwelling units, which is fewer than the 310 units initially estimated when the site was first announced in December 2019, Mr Mak said.
“The site could also yield 2,000 sq m of commercial space that could be developed into strata-titled retail units or offices. Due to its proximity to the MRT station that is surrounded by condominium developments, it is very likely that the commercial space will be used as shops, and food and beverage outlets,” Mr Mak added.
He noted that at least 1,000 sq m, or half of the commercial space in the new development must be used as a supermarket. “This would be welcomed by the residents in the Tanah Merah neighbourhood, especially in the Covid-19 ‘new normal’ when more people could be working from home and would not wish to travel too far to buy their daily necessities,” Mr Mak said.
In addition, Mr Mak said that as the land parcel is conveniently located next to Tanah Merah MRT station and within close proximity to Changi Business Park, the residential development would attract buyers’ attention and “have the potential to command attractive prices”.
“Compared to all the residential sites in both the H1 2020 GLS programme confirmed list and reserve list, the land parcel at Tanah Merah Kechil has the smallest GFA, which would require less capital requirement and hence, less financial risk to develop,” Mr Mak said.
The nearest project in the area with commercial units at the first storey is East Village Condominium located along Upper Changi Road, where a retail unit was transacted at S$2,973 per square foot in April 2019, Mr Mak said.
According to him, the residential development at Tanah Merah Kechil Link is likely to be launched between late 2021 to the first half of 2022. “By then, the impact of the Covid-19 outbreak would have weakened and the Singapore economic recovery should be underway. Hence, this project will be one of the more popular developments among new launch projects,” Mr Mak said.
All things considered, Mr Mak is of the view that the tender for this site could attract five to 10 bids from major developers, with the top bid ranging from S$840 to S$888 per square foot per plot ratio, or between S$238 million and S$255 million.
In view of the Covid-19 outbreak, the URA is offering a longer tender period of five months for this site, to provide developers with additional time to make their assessment, it said.
Tender for the Tanah Merah Kechil Link site will close at 12 noon on Oct 29. The tender closing will be batched with an executive condominium site at Yishun Avenue 9, launched in April this year.