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Three 99-year sites up for tender in govt land sale

1,300 new homes expected from ECs in Yishun, condo in Margaret Drive

[SINGAPORE] More private homes are in the pipeline as the government released three 99-year leasehold sites this month that are expected to yield 1,300 more units.

The two executive condominium (EC) sites at Yishun Street 51 are put up for tender from the confirmed list of the Government Land Sales (GLS) programme for the first half of this year, while the residential site at Margaret Drive will be made available on the reserve list.

The Yishun sites are expected to yield 1,010 units. Parcel A has a maximum gross floor area (GFA) of 50,302 square metres (sq m) while Parcel B has a GFA of 51,139 sq m.

The closing date for these two EC sites in Yishun is May 22, the Housing and Development Board (HDB) said yesterday.

As for the condominium site at Margaret Drive, it will be triggered for sale when an acceptable offer is lodged. With a permissible gross floor area of 22,195 sq m, it is expected to yield 275 units, the Urban Redevelopment Authority said.

Analysts noted that this land parcel has a good location - nestled in an established residential estate with nearby schools and amenities and within walking distance to Commonwealth MRT station.

It is also close to a wide range of shopping and dining options, including Queensway Shopping Centre, Ikea Alexandra and the upcoming Alexandra Central.

But they are not expecting the site at Margaret Drive to be triggered for sale in the next six months given the challenge of pricing such a project now.

"Land prices in the vicinity of Alexandra/Queenstown have risen significantly, developers may have difficulty maintaining their profit margin for this site as the current market seems to favour projects that are perceived as value-for-money," said Christine Li, head of research and consultancy at OrangeTee.

Ms Li noted that the supply situation in the Alexander/Queenstown area could be a concern for developers, as there are at least four other projects in the pipeline this year located at Commonwealth Avenue, Prince Charles Crescent (Parcel A and B) and Kim Tian Road.

Ong Kah Seng, director at R'ST Research, said that if developers submit very high land bids for centrally located sites, they might have to be prepared to sell the properties at almost break-even prices.

He expects the top land bid to come in at $780-880 per square foot per plot ratio (psf ppr).

"If triggered, it will be in the second half of 2014, earliest in the third quarter," he added. "There's also a handful of other well located sites in reserve list for developers to choose from - such as sites in Sterling Road, Alexandra View (Parcel A), Toa Payoh Lorong 6 and Lorong Lew Lian."

Consultants note that the top bids for the two EC sites in Yishun could be submitted by the same developer, as in the case of the Choa Chu Kang Grove sites. Some, however, caution that there may be an oversupply of ECs in the north and north-east regions of Singapore.

Nicholas Mak, executive director at SLP International, said there are six new EC developments that are yet to be launched for sale to home buyers.

These include the sites at Canberra Drive and Anchorvale Crescent that were sold this year, as well as the upcoming tender at Sembawang Avenue in May.

But Mr Mak added that he still expects the future EC projects on the Yishun sites to enjoy healthy interest from local HDB upgraders if they are priced attractively. He is expecting four to eight bids per site, with the top bids coming in the range of $330-366 psf ppr.

Mr Ong of R'ST Research said he expects the top bid for each Yishun site to be "fairly realistic" at $330-370 psf ppr.

"Following the cooling measures for ECs implemented in December, the five EC site tender closures in January and February already reflected that there is developers' consensus that EC land prices cannot exceed $400 psf ppr," Mr Ong said.

"If the land is bought at around $400 psf or near $400 psf, then it couldn't offer developers the flexibility to lower the sale price should the mortgage servicing ratio (MSR) cap indeed adversely affect demand for new ECs," he said.