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Govt releases three residential sites for sale
Two Yishun sites and one at Margaret Drive could yield 1,300 homes
By: Cheryl Ong
THREE residential sites were rolled out for sale under the first half of the Government Land Sales (GLS) programme yesterday.
Two of the parcels are adjacent to each other at Yishun Street 51 and meant for executive condominiums (ECs). They were put up for sale under the confirmed list, while a plum residential site at Margaret Drive was made available on the reserve list.
Confirmed sites go on sale regardless of interest.
Those on the reserve list are put up for tender if a developer submits an acceptable initial offer.
The three sites, which are on 99-year leases, could yield about 1,300 homes, the Urban Redevelopment Authority and Housing Development Board said in a joint statement.
Market watchers said they do not expect developers to trigger a tender for the Margaret Drive site, given steep land prices and a slowing property market.
However, developers are likely to bid for both EC sites in Yishun at the same time to eliminate competition that could come from the neighbouring development, they said.
One of the plots, Parcel A, has a maximum gross floor area (GFA) of 50,302 sq m and can yield 490 units.
Parcel B could have 520 units and has a maximum GFA of 51,139 sq m.
Ms Christine Li, research head of property agency OrangeTee, said: "If we look at the previous EC twin tenders in Choa Chu Kang, we can expect some developers to try and win both sites.
"Winning both would allow the developer greater control over pricing and launch timing."
Mr Ong Kah Seng, director of R'ST Research, expects both sites to attract seven bids each, with the top ones about $350 per sq ft (psf) per plot ratio (ppr).
The projects' selling prices should start from $800 psf to "allow developers to enjoy a decent, small profit", he said.
This would price the projects close to Skypark Residences, an EC in neighbouring Sembawang.
However, Ms Li warned that developers should be cautious of a potential oversupply of ECs in the north, as another site at Canberra Drive - in addition to Skypark Residences - is expected to be launched in May next year. This could yield about 600 units.
Experts were less optimistic about the 4,810 sq m site at Margaret Drive despite its "attractive" location.
They doubted that it would be triggered in the next six months.
Mr Eugene Lim, key executive officer of real estate firm ERA Realty, pointed out that developers are more conservative about the private property market because of multiple rounds of cooling measures.
Mr Ong of R'ST Research noted: "There is also a handful of other well-located sites on the reserve list for developers to choose from - such as in Sterling Road, Alexandra View (Parcel A), Toa Payoh Lorong 6 and Lorong Lew Lian."
If the Margaret Drive site is triggered, it should attract about five bids, with a "realistic" top offer of about $750 to $880 psf ppr, he added.
Buyers are finding it hard to obtain large mortgages, so developers should price any project on the site attractively, and that could translate into realistic land bids, said Mr Ong.
The 4,810 sq m Margaret Drive site could yield 275 units and has a maximum GFA of 22,195 sq m.
Tenders close on May 22 for both EC sites.