Two sites up for sale amid weak market

Source : Straits Times - 20 Nov 2008

THE Urban Redevelopment Authority (URA) is testing the waters by offering two 99-year leasehold sites - one residential and one commercial-residential - for sale.

The sites have been placed on the reserve list, meaning they will be tendered out only if developers indicate sufficient interest.

However, property consultants doubt they will attract much, if any, interest from developers, given the weak market.

Earlier this week, monthly URA data showed that developers managed to sell just 112 units last month, a level comparable to the Sars period in 2003. It also showed that about 50 home buyers did not complete deals last month.

The first site, at Dakota Crescent, is for a residential project with a gross floor area of 647,599 sq ft. It is near the future Singapore Sports Hub and upcoming Dakota MRT station.

The second, at Seletar Road, is for a mixed commercial and residential development with a gross floor area of 226,042 sq ft. It is in a residential area at Seletar Hills near the future Seletar Aerospace Park.

Early this month, the Government cancelled two of three tenders of confirmed sites for the rest of the year. A tender for an executive condo in Punggol went ahead, but this site attracted no bids. With the market hit by the global financial crisis, developers are taking a breather from land banking, said a consultant.

‘The current cautious mood and slow sale activity in the residential market have diminished developers’ appetite for development sites,’ said Mr Nicholas Mak, Knight Frank’s director of research and consultancy.

He said the chances of developers expressing interest to trigger the launch of Dakota Crescent are slim, despite its good location.

He estimates the launch price for a proposed development with up to 550 units at Dakota Crescent at $650 to $680 per sq ft (psf), or a land price of roughly between $170 and $220 psf per plot ratio. The Seletar plot, he said, is estimated at $120 to $150 psf per plot ratio. A condo there could fetch prices of $530 to $570 psf if launched next year and beyond, said Mr Mak.