Govt Land Sales programme releases sites in Kampong Java and Tampines for sale

Singapore

TWO residential sites - one in Kampong Java and the other in Tampines - have been released for sale under the Government Land Sales (GLS) programme for the second half of the year.

Together with the Marina View "white site" released on Wednesday, the three sites make up the first GLS sites released since it was announced last month that from early 2019, the minimum average unit size will be raised, and the maximum number of units allowed in new private flat and condominium developments outside the central area would be lowered.

The revised rules will apply to new development applications for projects submitted on or after Jan 17 next year - and will likely apply to these three sites.

The Kampong Java site, released under the Confirmed List, spans 11,643 sq m and has a maximum gross floor area (GFA) of 32,602 sq m. It can yield 435 units, the Urban Redevelopment Authority estimates.

Schools such as Anglo-Chinese School (Junior) and EtonHouse Pre-School (Newton) are located nearby, as is the Newton Food Centre.

This site would be "a litmus test" of the market, given the revised unit size regulations, said Tricia Song, head of research for Singapore at Colliers International. She estimates a S$2,100 per square foot (psf) average selling price, and a land bid of S$1,350 psf per square foot per plot ratio (psf ppr), or S$470 million.

"Response to the Kampong Java site could provide an indication of developers' confidence in the high-end home market after a spate of collective sales in the area and the recent announcement on revised unit size guidelines."

The site sits just outside the central area and would therefore have to fall in with the new minimum average unit size of 85 sq m (raised from 70 sq m), she said.

Nicholas Mak, executive director at ZACD Group, said the Kampong Java Road would likely attract "healthy interest" due to its prime location, though he put the reasonable top bid at between S$421 million and $456 million, or S$1,200 to S$1,300 psf ppr due to the cooling measures.

"Although this site is located in District 9, it is outside the areas with the stricter development regulation regarding unit sizes."

He was referring to the other announcement last month - that developments in nine areas (up from four) will have to follow a new average minimum size of 100 sq m. The nine areas are Marine Parade, Joo Chiat-Mountbatten, Balestier, Telok Kurau-Jalan Eunos, Stevens-Chancery, Pasir Panjang, Kovan-How Sun, Shelford and Loyang.

The Tampines site along Ave 10, released by the HDB for an executive condo (EC) development, spans 24,939 sq m, and has a maximum GFA of 69,829 sq m. The site can accommodate 695 units, though the number will be capped at 700.

Analysts say this EC site would be hotly contested, given the short supply in the market and fierce bidding for the EC sites this year. The tenders for Anchorvale Crescent and Canberra Link in September pulled in seven and nine bids respectively; the top bids were S$576 and S$558 psf ppr respectively.

Huttons Asia's Lee Sze Teck said: "Tampines is the first regional centre in Singapore and a sought-after place to live in. The parcel sits in a mature estate with amenities like Our Tampines Hub, connectivity options like the Tampines Downtown line and green spaces like Bedok Reservoir."

Colliers' Ms Song, referring to the new minimum average unit size of 85 sq m, noted that the average unit size suggested by the development cap of 700 units would be above 85 sq m."

She expects seven to nine bidders and a top land bid of S$560 psf ppr or S$420 million. ZACD's Mr Mak thinks the reasonable top bid in the tender for this site could range from S$398 million to S$428 million, or S$530 to S$570 psf ppr.

Both sites have 99-year leases. Their tenders close on Jan 15, 2019.

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