Buffet-table spread of sites for developers

Source : Business Times – 7 Nov 2009

But the jury is out on whether the govt’s release of plots will tame land bids, which have soared wildly at state tenders

THE government is offering developers a platter of residential sites through the confirmed and reserve lists for the next half – including several plots in the vicinities of hot-selling condo launches this year, such as Caspian near Jurong Lake and Alexis near Queenstown MRT Station.

However, the jury is out on how much this will tame land bids, which have soared wildly at recent state tenders.

Four of the eight sites on the confirmed list and at least four reserve list sites are near MRT stations – but there are also many sites not in the vicinity of train stations where more affordable private housing could be built.

A few plots are close to the city while the majority are in typical suburban locations where private condos catering to HDB upgraders are located.

Peter Ow, Knight Frank executive director (residential), said: ‘The government’s main message is that it is taking care of the upgraders’ market. The current release is to tackle and try to moderate prices in the upgraders market which concerns most Singaporeans.’

For new private homes, prices in the mass-market segment have surpassed their 2007 peak levels; whereas for high-end homes, prices have yet to recover to their 2007-highs, he added.

‘Thus, there are no sites in the Core Central Region, which includes the prime districts. The government recognises the fact that not all sectors of the residential market are doing well, especially high-end homes.’

Chua Chor Hoon, DTZ’s South-east Asia research head, said that with so many choices, developers are unlikely to put in aggressive land bids in future tenders.

Leonard Tay, CB Richard Ellis director (research), said that the latest supply may moderate slightly some of the exuberance at recent state tenders but prime sites near MRT stations would still be well contested and developers may put in a premium.

Putting the latest supply numbers in perspective, Knight Frank chairman Tan Tiong Cheng suggested that the 2,925 private homes that can be developed on the eight confirmed list plots for H1 2010 would not significantly bring down land bids as the reintroduction of supply on this list is long overdue after an absence of one year.

‘So it’s more like catching up. Plus, there’s no alternative supply of mass market sites from the private sector through collective sales, for instance,’ he added.

Of the 10 new housing sites on the latest confirmed and reserve lists, Knight Frank’s Mr Ow picks out the confirmed list plot next to Potong Pasir MRT Station, which can yield about 150 private homes, and the reserve list site at Stirling Road near Queenstown MRT Station as the ones likely to fetch the highest bids – about $500 per square foot per plot ratio (psf ppr) and above $500 psf ppr respectively, because of their proximity to the city.

DTZ’s Ms Chua pointed out that the Stirling Road site, which can be be turned into a condo with about 405 units, is quite near the CBD and very close to HDB flats. A new condo on the site would generate demand from both owner occupiers and investors. ‘There’s good rental demand for Queens and Anchorage condos nearby,’ she said.

Agreeing, Mr Ow said that the Stirling plot, with a 4.2 plot ratio (ratio of maximum potential gross floor area to land area) could probably be built up to 40 storeys, in line with Queens condo just in front of it as well as HDB blocks in the Dawson estate nearby.

Property consultants said that other new sites that are likely to be popular include plots near Simei and Lakeside MRT stations as well as a plot in Pasir Ris near Downtown East and Pasir Ris Park.

The land parcel near Lakeside MRT Station, which is under the confirmed list, can produce some 525 private homes. It is next to Caspian, which sold like hot cakes in February and helped revive private homes sales after last year’s global financial crash. Another plot on the confirmed list, diagonally opposite Simei MRT, can produce 250 units. It is also near UOL Group’s Double Bay Residences which was released this year. The confirmed list site at Pheng Geck Avenue near Potong Pasir MRT is close to another 2009 hot seller, 8@Woodleigh.

Among the new reserve list sites, the Stirling Road plot is in the vicinity of Alexis condo, which was also among the earlier hot projects this year.

The Ministry of National Development has also injected two plots in Hougang into the latest reserve list – one at Hougang Avenue 2 designated for a low-rise development near Rosyth School, and the other, at Hougang Avenue 7.

Another new reserve list plot is at Miltonia Close in Yishun, next to The Shaughnessy, a completed condo. It may be far from town and not next to an MRT station but a new low-rise development on the site will be attractively located, next to Orchid Golf Course and near Lower Seletar Reservoir.

Developers more familiar with the Eunos area may consider a plot at Foo Kim Lin Road which can generate about 535 units. It is a new plot on the reserve list.

‘Developers now have a whole buffet-table spread of sites to choose from,’ summed up CBRE’s Mr Tay.