A second residential site has been put up for sale by the Government, which is again giving developers more time to assess the property market amid the Covid-19 pandemic before submitting any bids.
The land parcel in Tanah Merah Kechil Link is for a mixed residential development with the first storey slated for commercial space. It has an area of 8,880 square metres (sq m) and a maximum gross floor area (GFA) of 24,864 sq m.
The 99-year leasehold site off New Upper Changi Road can potentially house about 265 apartments, compared with the estimated 310 units when the site was first announced last December. It can also yield 2,000 sq m of commercial space that can be developed into strata-titled retail units or offices.
The tender will close at noon on Oct 29, after a longer tender period of five months, the Urban Redevelopment Authority said in a statement yesterday.
Tender duration of government land sales (GLS) sites usually ranges from six to eight weeks.
The October closing date of this tender means the site will be batched with an executive condominium site in Yishun Avenue 9 that was launched on April 30.
Property consultants said extending the tender period could help GLS sites obtain higher bids as the pandemic may be contained by then, boosting market sentiment.
Both sites come under the confirmed list for the first half of 2020 GLS programme. There is one more on the confirmed list of residential sites that has yet to be launched. It is in Jalan Anak Bukit and can potentially have 865 units.
ERA Realty head of research and consultancy Nicholas Mak said the Tanah Merah Kechil Link plot is a “choice” site, given its location and size. It is located next to Tanah Merah MRT station and in close proximity to Changi Business Park. With no shopping mall around the MRT station, there would be strong demand for shops and food and beverages outlets, he added.
Compared with the other GLS sites for the 2020 first half on both the confirmed and reserve lists, the Tanah Merah Kechil Link site has the smallest GFA, which means less capital requirement and hence, less financial risk to develop it, he said.
Given these factors, Mr Mak foresees the tender attracting five to 10 bids from major developers, with the top bid ranging from $238 million to $255 million, or $840 to $888 per square foot per plot ratio (psf ppr).
Mr Wong Xian Yang, Cushman & Wakefield’s associate director of research for Singapore and South-east Asia, noted that the last site sold in the vicinity is now the Grandeur Park Residences condominium, which is 98 per cent sold as of last month at a median psf price of $1,415.
“This reflects the site’s strong locational attributes and underlying demand in the area,” he added.
Mr Wong said the Tanah Merah Kechil Link winning bid could be between $820 and $870 psf ppr. “Despite the site’s strategic location, developers are expected to bid cautiously due to higher construction costs and a severe economic recession as a result of Covid-19,” he said.
Yesterday, three industrial sites were also released under the confirmed list of the Industrial GLS programme for the second half of this year. They are at Plot 2 Tampines North Drive 3, Plot 3 Gambas Avenue/Sembawang Avenue, and Plot 7 Jalan Papan.
Owing to the Covid-19 situation, the tenders for the first two sites in Tampines North and Gambas Avenue are postponed from the first half of the year. This is to give industrialists more time to prepare for the tenders, said the Ministry of Trade and Industry.
There are three industrial sites on the reserve list: Plot 2 Jalan Papan, Plot 11a Tampines North Drive 5, and Plot 5 Jalan Papan.
Sites under the reserved list will be put up for tender if an interested party submits an offer of a minimum purchase price that is acceptable to the Government; or if more than one party submitted minimum purchase prices that are close to the reserve price for the site.
Updated from : The Straits Times, 29 May 2020