Singapore’s Urban Redevelopment Authority is including a residential site in Bukit Timah on a confirmed list of six sites to be put on the auction block in the second half of this year as authorities move to replenish the city’s dwindling housing pipeline.
The URA’s government land sale (GLS) programme for July through December released on Tuesday include a 4,600 square metre (49,500 square foot) residential site between the Beauty World Centre and Bukit Timah Plaza which could yield 160 new condo units in one of the city’s most posh neighbourhoods.
“The Bukit Timah Link site – with a palatable development size of 160 units – should garner healthy interest among developers, including smaller players,” said PropNex Realty research and content head Wong Siew Ying. She added that, “The six confirmed list sites are quite well spread out including sites in the suburban areas, the city fringe and the city centre, which will provide would-be homebuyers with varied private housing options.”
The list of sites for sale in the second half of 2022 sets up developers to start building 3,505 new homes in the city, or 26 percent more than the supply provided for in the first six months of the year, after average home price index inched up by 0.4 percent in the first quarter from the preceding three months.
Strong Reception Anticipated
Set to be launched for sale in August, the site at the junction of Bukit Timah Link and Jalan Jurong Kechil, near the Beauty World MRT station, is likely to find bidders encouraged by the strong sales performance of the adjacent The Linq@Beauty World by BBR Holdings, which saw 96 percent of its units snatched up at its initial opening nearly two years ago, Wong said.
The site on Bukit Timah Link sits just across from a Jalan Anak Bukit mixed-use project development of being developed by Far East Organisation and its Hong Kong-based sibling Sino Group – which the joint venture won in a state tender in August 2021 for S$1.03 billion ($750 million).
Another site on the GLS programme which is expected to catch the attention of developers, and which is likely to be the priciest parcel on the list, is a 12,300 square metre mixed-use plot on Marina Gardens Lane. To be launched for sale in December, the land parcel sits next to the Gardens by the Bay tourist attraction in Singapore’s downtown core.
The URA said the inclusion of the combined commercial and residential project would mark the first site to be made available on Marina Gardens Lane as authorities continue to ramp up development of the Marina South neighbourhood with around 795 new homes and 750 square metres of fresh commercial space to be built.
“Located next to the upcoming Marina South MRT station, the land parcel has excellent locational attributes,” said Wong Xian Yang, head of research for Cushman & Wakefield in Singapore. “However, the site quantum is large and bids for this site are expected to exceed $1 billion. The Marina Gardens Lane site would test developers’ appetite for high-end residential homes in the CBD.”
Appetite for Smaller Sites
Both land sites are attractive locations for developers but the estimated high prices on the more premium locations “could be a deterrent to potential bidders” while some smaller parcels may “enjoy good demand” with their smaller ticket sizes, according to Ong Teck Hui, senior director of research and consultancy at JLL.
For the smaller sites, Ong estimated the price of the Bukit Timah plot may stay below the S$200 million mark while bids for a site on Hillview Rise in the Bukit Batok planning area which could yield 335 new units might average around S$300 million.
The land premium for these sites are likely to amount to just fraction of the Marina South parcel. Also likely to attract bids of around S$1 billion, according to Ong’s estimates, is a 50,700 square metre mixed-use plot in Tampines, on the upper East Coast, which could deliver 1,190 new homes and 14,000 square metres of commercial space, with analyst noting that the scale of these projects could limit bidding.
“The recent tender closing for the residential sites at Dunman Road and Pine Grove (Parcel A) shows lacklustre demand for large sites with high land cost. However, since the launch of the subject site is in December 2022, it remains to be seen if sentiments and demand for large sites could improve by then,” he said.
The recent tender for the site along Katong’s Dunman Road only attracted two bids with SingHaiyi Group making the highest offer at S$1.28 billion, according to a URA announcement last week.
A smaller site in Pine Grove, meanwhile, garnered five tenders, with a joint venture between UOL Group and its Singapore Land Group subsidiary emerging as the top bidder after offering S$671.5 million for the land parcel.
Eight Parcels in Reserve
While this latest GLS programme features more homes compared to the 2,785 units provided for in the first-half programme, the URA also included in its announcement eight land parcels to be placed on its reserve list which could provide builders potential locations for future developments, should there be a need to boost supply further.
This includes six residential sites, one hotel site and a white site – a parcel with a larger range of uses – in Woodlands Avenue 2 in northern Singapore. Combined these projects can yield 3,805 private homes, 80,000 square metres of commercial area and 530 new hotel rooms.
Cushman & Wakefield’s Wong said the sales of a second parcel at Pine Grove parcel and a site on Clementi Avenue 1 would likely draw the most attention after the tender for an adjoining Pine Grove parcel last week drew fierce bidding while launches of developments surrounding the Clementi site over the past three years have registered strong sales with take-up rates of over 88 percent.