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Mixed views over West Coast Vale residential site

West Coast Vale, the newly released residential site under the government land sales (GLS) programme may see warm interest from developers on the back of improved sentiment and a lack of available development sites, some property consultants say.

Posted on 08-Dec-2016

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Mixed views over West Coast Vale residential site

West Coast Vale, the newly released residential site under the government land sales (GLS) programme may see warm interest from developers on the back of improved sentiment and a lack of available development sites, some property consultants say.

There are also others who believe that the slow take-up at nearbyParc Riviera condominium projectby EL Development, which was launched last month, may serve as a dampener.

The 1.64-ha site which was released on Wednesday by the Urban Redevelopment Authority (URA) under the Confirmed List of the second-half 2016 GLS programme, could potentially yield up to 520 residential units. Confirmed List sites are launched according to schedule, regardless of demand.

Most consultants are expecting five to 10 bids with the top bid being in the region of S$529 to S$600 per square foot per plot ratio (psf ppr).

Among them, JLL national director for research and consultancy Ong Teck Hui projected that the top bid is likely to be between S$550 and S$590 psf ppr, a shade higher than the S$551 psf ppr that EL Development paid for the Parc Riviera parcel in August, due to its slightly better location and more positive outlook in the current market.

"Unit buyers will like the private residential ambience, the site's frontage to Sungei Pandan and the park connector," he said. "Amenities such as eating and shopping are within a reasonable distance but MRT stations are quite a distance away."

Mr Ong Kah Seng, R'ST Research director, said he expects developers to submit fairly positive bids for this site and the top land bid for this site to be on a par with or slightly higher than that for the Parc Riveria site.

This will be underpinned by an emerging perception among developers with higher risk appetite that there may be a faster-than-anticipated recovery in buyers' interest and private home prices, he added.

However, there are others who felt that the site is not that enticing as it is not located within walking distance to the nearest MRT station, retail shops and amenities.

"As the present buying take-up rate of the nearby Parc Riviera condo project is relatively slow, this subject site is not expected to attract keen interest from most developers," said SLP International executive director Nicholas Mak.

"Some developers may take advantage of the expected weak interest in this site to submit low opportunistic bids," he added.

Cushman & Wakefield research director Christine Li, however, is projecting an even lower winning bid of S$450 to S$500 psf ppr for this site, below the winning bid for the Parc Riviera site. Ms Li explained that this site that is up for tender is quite a distance away from the nearest MRT stations and that the project needs to be priced attractively at mass-market entry levels of S$1,000 to S$1,100 psf in order to gain good market response.

There is also competition from Parc Riviera, as well as IOI Properties' The Trilinq, which has 288 out of 755 units currently unsold. Still, there is a possibility that EL Development may consider placing a slightly more aggressive bid to secure the West Coast Vale site to maintain pricing power in the area, she opined.

The Business Times

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