Canberra Link EC site likely to be hotly contested

Singapore

THE scarcity of land parcels released to build executive condominiums (ECs) could turn developers' attention to plots in Canberra Link and Anchorvale Crescent under the government land sales (GLS) programme, consultants say.

The Canberra Link site was launched on Thursday for sale under the Confirmed List of the H1 2018 GLS programme, while the site in Anchorvale Crescent was released for application under the Reserve List. Sites on the Reserve List will be put up for tender only when a developer has indicated a minimum price that is accepted by the government.

On Thursday, the government also launched a private residential site at Jalan Jurong Kechil for sale on the Confirmed List and released another site at Clementi Avenue 1 under the Reserve List. Together, these four sites can yield about 1,920 residential units.

"Demand and supply dynamics of the EC market (depleting unsold stock and limited sites for EC development), coupled with proximity to the future Canberra MRT station which is slated to open by December 2019 are factors that strengthen the attractiveness of the Canberra Link EC site over the Jalan Jurong Kechil site," said JLL head of research and consultancy Tay Huey Ying.

Huttons Asia head of research Lee Sze Teck said proximity to the future Canberra MRT station is a key selling point for the Canberra Link EC site. "There are not many sites for EC developments that are within walking distance to MRT stations. Furthermore there is strong demand for ECs in the market," he said.

So far this year, only one EC project - Rivercove Residences in Sengkang by Hoi Hup Realty and Sunway Developments - has been launched and is a near sell-out. Another EC site on the Confirmed List, at Tampines Avenue 10, is slated to be launched for tender only in October.

Mr Lee estimated the number of unsold EC units in launched projects as of Thursday at around 40.

With no new launch of EC projects for the rest of this year, interested buyers will either have to make their choice among the unsold units or wait for the Sumang Walk EC project by the City Developments-TID Residential joint venture next year. "The top bid for the Canberra site might come up to between S$450 and S$500 per square foot per plot ratio (psf ppr)," he added.

ZACD executive director Nicholas Mak noted that while developers are spoilt for choice with the many collective sale sites currently on offer in the private land sale market, there is a relatively longer due diligence and legal process to acquire private land.

"Furthermore, there is always the risk of protracted legal tussles in enbloc sales. Therefore, some developers would prefer the relatively simpler and quicker land acquisition process for GLS sites," he said.

Mr Mak also concurred that the potential shortage of new EC units in the primary market in the next 12 to 18 months may cause the EC site at Canberra Link to be highly contested, drawing about 10 to 16 bids.

"A reasonable top bid in the tender for this site could range from S$194 million to S$243 million (S$400-500 psf ppr). However, it would not be surprising if a very bullish developer were to submit a similar bid to the top bid for the Sumang Walk site, surpassing S$267 million or S$550 psf ppr."

The tender for the land parcels at Jalan Jurong Kechil and Canberra Link will close at noon on Sept 4.

OrangeTee & Tie head of research and consultancy Christine Sun is also expecting the EC site at Anchorvale Crescent on the Reserve List to attract bidders who see strong buying demand given the growing pool of HDB upgraders in the north-east region. More HDB flats in Sengkang and Punggol are reaching minimum occupation period (MOP) in recent years.

While most consultants find Jalan Jurong Kechil to be relatively less attractive due to its distance from Beauty World MRT station, about 900 metres away, Ms Sun begged to differ.

She felt that there has not been a GLS site launched in the west for a while and going by past records, the take-up of new launches in the west has been strong. "Current stock is also quite low in the region, indicating that demand for new homes will be healthy for that area," she said.

Some consultants are also expecting the private residential site at Clementi Avenue 1 on the Reserve List to be triggered for sale given that it is located in a mature estate with plenty of amenities and good schools.