CDL-TID joint venture's top bid for Punggol site sets record for EC land

AMID a severe supply shortage in the executive condominium (EC) segment, an EC site in Sumang Walk in Punggol fetched a whopping 17 bids at a state tender that closed on Tuesday.

The top bid of S$509.37 million works out to a record to S$583 per square foot per plot ratio (psf ppr). It came from a joint venture between City Developments' fully owned subsidiary CDL Constellation and TID Residential.

TID Residential is a fully-owned unit of TID Pte Ltd, which in turn is a joint venture between Hong Leong Holdings and Mitsui Fudosan Co.

The top bid was 4.8 per cent higher than the second highest bid of of S$486 million or S$556.26 psf ppr from Qingjiang Realty (Residential); followed by a tie-up between Yanlord Singapore Residential and Soilbuild Group Holdings, which offered S$450 million for the site. Hoi Hup Realty teamed up with Sunway Developments for a S$446.6 million bid.

Sing Development, FEC Properties and Changi Properties joined forces, placing a bid of S$431.69 million.

Evia Real Estate (8) teamed up with Gamuda (Singapore) for a S$426.37 million bid.

Also taking part in the tender was MCC Land (Singapore), which bid S$413.7 million.

The lowest bid, from Ho Bee Land unit HB Lombard, was S$373.81 million, which works out to S$427.85 psf ppr.

All 17 bids surpassed the previous record price for EC land, which was set in July 2013, for the Lake Life site in Tao Ching Road/Yuan Ching Road near Jurong Lake.

The Sumang Walk site's tender was conducted by the Housing & Development Board, acting as land sales agent for the state.

A maximum of 820 residential units has been stipulated for the EC project on the Sumang Walk site. The 2.7 ha land parcel is adjacent to My Waterway @ Punggol.

ECs are a public-private hybrid form of housing with initial buyer eligibility and resale conditions that are completely lifted 10 years after an EC project has been completed.

Analysts noted that the strong turnout and bids at Tuesday's tender are a reflection of the market being starved for new EC sites for some time. The Sumang Walk site was the only EC plot that was offered for sale in the Government Land Sales (GLS) Programme for the whole of last year.

JLL national director Ong Teck Hui commented that the top bid was "stunning", "way above market expectations". It was also 64 per cent higher than the top bid of S$355 psf ppr for the Anchorvale Lane site in August 2016, which was the last EC tender.

"The absence of EC land tender for one-and-a-half years, a severely undersupplied market with a paltry unsold stock of less than 1,000 EC units (including the upcoming 628-unit Rivercove Residences along Anchorvale Lane in Sengkang) and a rising private residential market are contributors to the bullish outlook for the EC market among bidders."

Last year, developers sold 4,011 EC units.

Mr Ong estimated CDL and TID's breakeven cost at close to S$1,000 psf - above recent new EC transactions in the area. "A few transactions at The Vales (in Sengkang) in recent months averaged S$860 psf. There seems to be an assumption that EC prices will rise by more than 20 per cent by the time the project on the subject site is launched."

CDL is upbeat about prospects for the proposed project on the Sumang Walk site. Its group chief executive Sherman Kwek said: "We are confident of its success given its excellent location and desirable attributes. Punggol, slated to be Singapore's first Digital District, has an exciting future and we believe this will make the site very compelling to home buyers.

"It is also very close to LRT and MRT stations as well as a bus interchange, which is hard to come by for an EC project. Being right next to My Waterway@Punggol, the site also offers the opportunity to create a landmark waterfront residence with pleasant views."

If awarded the site, the CDL and TID joint venture will explore a project comprising 13 blocks of 10 to 17 storeys. "To maximise the scenic views, windows will be oriented towards Punggol Reservoir and My Waterway@Punggol. The sizable land area will also allow for generous landscaping," CDL said in a release.

This will be CDL's ninth EC project.

While Tuesday's tender set a record unit land rate for an EC site, the 17 bids were shy of the 19 bids received in 1997 for a Boon Lay Way site, which was developed into the Summerdale EC project, said Huttons Asia head of research, Lee Sze Teck.

For the first-half 2018 GLS Programme, three EC sites will be on offer: a plot in Canberra Link in the Sembawang area through the confirmed list, and two land parcels through the reserve list: one along Tampines Avenue 10 and the other along Anchorvale Crescent in the Sengkang area.