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27 September 2012

27th September, Thursday




Cautious bidding likely for Sengkang, Pasir Ris EC sites

Source: Business Times

The executive condominium (EC) market may be approaching saturation point, even as the government puts up two more 99-year leasehold EC sites at Sengkang EastWay/Fernvale Link, and Pasir Ris Drive 3/Pasir Ris Rise for sale.

The first site at Sengkang West Way/Fernvale Link (Parcel B) sits on a 151,779.6 sq ft plot, and has a maximum gross floor area (GFA) of about 455,338.8 sq ft. It is expected to yield 420 homes.

The second site at Pasir Ris Drive 3/Pasir Ris Rise has a site area of about 297,729.5 sq ft, and a maximum GFA of 625,231.9 sq ft. It is envisaged to yield about 590 homes.

Lee Sze Teck, senior manager, training, research and consultancy, at DWG, expects developers to be cautious in their bidding. He said: "With the exception of Heron Bay, which attracted overwhelming response, other EC projects like One Canberra and Watercolours are around 40 per cent sold."

A possible reason could be that while HDB has raised the income ceiling and allocation for second-timers, it has also increased the minimum occupation period (MOP) for HDB flats which limits the number of HDB upgraders. First-timers, however, have a plethora of options like BTO and DBSS which might divert demand.

The EC site in Pasir Ris can expect strong competition from neighbouring condominium developments, such as Sea Esta, Ripple Bay, Watercolours and Seastrand, according to another analyst.

"As at August 2012, the four projects still have about 385 unsold units in total. In addition, the EC market is becoming more competitive as the government injects more EC land supply into the market. Competition also comes from new launches in Punggol and Sengkang areas, which are attracting buying interest for the improved amenities and facilities," he added.

Analysts expect between four and eight bidders for the site in Pasir Ris, with a top bid of $250-$336 per sq ft per plot ratio (psf ppr) while the Sengkang Site could see a top bid of $270-$330 psf ppr.

The site at Sengkang could draw a higher bid because Sengkang can expect more activity over the next one to two years on completion of the nearby HDB estates, H20 Residences and other facilities, including the Aerospace Park and The Seletar Mall at Fernvale LRT Station.

However, another analyst reckons that the interest developers have shown for EC sites in the first half of the year suggests that they believe the EC market is still robust.

In addition to the two EC sites, a 99-year leasehold site at Alexandra View (Parcel B), has been made available on the Reserve List system. The 69,981.5 sq ft site has a maximum GFA of 342,916.3 sq ft. It is expected to yield some 375 homes.

"The Alexandra/Redhill area is viewed as one of the prime locations with its close proximity to central downtown. Notwithstanding that, there has been an increase in land supply in the vicinity with three land sites sold over the past 10 months. We foresee land bids for this site to be competitive as developers seek well-located sites in the central region," one analyst said.

Said DWG's Mr Lee: "Ascentia Sky is almost fully sold as at August 2012. The optimism reflected in the bids for Prince Charles Crescent could result in Parcel A being triggered first. If Parcel B is triggered, the trigger price could be between $750 and $800 psf ppr or $257 to $274 million."

All told, the three sites are expected to yield about 1,385 units.

Tender for the EC sites at Sengkang and Pasir Ris will close at 12 noon on 8 November and 22 November, respectively.


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Plans for mid-range condo on Dairy Farm Road site

Source: Business Times

Having landed the tender for a 99-year leasehold private residential site on Dairy Farm Road, First Shine Properties and Meadows Bright Development are planning to develop a mid-range condominium of about 400 units.

A 50:50 joint-venture company, Bukit Timah Green Development (BTG), has been incorporated with a paid-up capital of $1 million. Subject to approval from the Urban Redevelopment Authority, BTG will handle the development of the site.

Located in an established private residential area, the site has a land area of 188,863 sq ft, a plot ratio of 2.1 and a maximum gross floor area of 396,621.1 sq ft.

The site is about 600 metres from the future Hillview MRT Station on the Downtown Line.

Based on the maximum gross floor area, the purchase price works out to approximately $616 psf per plot ratio.


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Enough flats at 'right' prices for first-timers

Source: The Straits Times

While public housing has become more expensive, the Government has pledged to ensure that it remains within the reach of young Singaporeans.

That means building enough Housing Board flats and setting their prices "right", so they are affordable for first-time buyers, said Prime Minister Lee Hsien Loong this week.

"We're building for Singaporeans. So if Singaporeans say they can't afford to buy the flat, who can afford to buy the flat?" he said. "It's not my purpose to build flats and leave them on the shelf. It's my purpose to build flats and sell them to Singaporeans at a price which they can afford, which is what we're going to do."

Mr Lee said Singapore's current system was but one type of model of public housing.

In other countries, the aim was simply to provide a roof over citizens' heads, with many renting instead of buying a home.

The Singapore Government uses this rental concept for older folks, who can choose to lease a flat for 30 years, said Mr Lee.

But for young people, Mr Lee said he preferred giving them a housing asset as an "endowment". "This is for you for life and to help you have a stake in Singapore and to make sure that you start off with chips which can bring you to an equal starting point," he said.

"You spend a reasonable proportion (on housing) and you can pursue your career, you can bring up your family and you can have a satisfying life. I think that's a better solution."

On keeping flats within their reach, Mr Lee said of the bigger supply of 25,000 flats this year and another 20,000 next year: "We will build enough. We have enough land. And we can price it so that it will remain affordable. The pricing is within our control."


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Bids for Yishun industrial site beat expectations

Source: Business Times

An industrial site at Yishun Avenue 9 drew a total of five bids with a top offer of $31.69 million or $100.48 per sq ft per plot ratio (psf ppr) from Soilbuild Group Holdings, slightly above market expectations.

Property consultants had initially estimated offers of between $50 and $70 psf ppr owing to the shorter, 30-year lease period and a relatively smaller size (11,719.9 sq m or 126,152 sq ft), in comparison to adjacent plots.

OKH Holdings, was the second highest bidder, with an offer of $28.7 million or $91 psf ppr. The lowest offer for the site, which has a maximum permissible gross plot ratio of 2.5, was from Vantage Properties at $22.8 million or $72.28 psf ppr.

"The offers are fairly bullish because at this price, their breakeven price could be as high as $265-290 psf ppr," commented one analyst. "But that said, Soilbuild is an experienced property developer, and must know what they are doing. Also, since they are a construction firm they can control the cost element."

He explained that although the government's reduction of land lease to 30 years can probably slow down the pace of industrial property price increases, developers are expecting a lot of liquidity in the market and that is why prices are not sky-rocketing but slowly creeping up.


Links to the story:$31,7m