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Spanish Village put up for collective sale for S$882m

Marketing agent says asking price for freehold property in Farrer Road reflects land rate of S$1,721 psf ppr

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Yet another property development in District 10 has been put up for sale. Owners of the 226-unit freehold property in Farrer Road known as Spanish Village are asking for S$882 million, jumping on the bandwagon of collective sales hopefuls in the prime districts.

Singapore

YET another property development in District 10 has been put up for sale. Owners of the 226-unit freehold property in Farrer Road known as Spanish Village are asking for S$882 million, jumping on the bandwagon of collective sales hopefuls in the prime districts.

So far, 25 collective sale sites in districts 9, 10 and 11 have concluded, chalking up S$5.5 billion in total sale proceeds and a median land rate of S$1,664 per square foot per plot ratio (psf ppr), based on The Business Times' compilation.

There are at least 10 other launched redevelopment sites in the prime districts waiting for buyers.

Edmund Tie & Company, the marketing agent for Spanish Village, said that the asking price for the freehold residential site reflects a land rate of S$1,721 psf ppr, inclusive of a development charge of about S$30 million.

Built in the 1980s and spanning 331,457 sq ft, the site is zoned for residential use with a gross plot ratio of 1.6.

The area is surrounded by schools such as Nanyang Primary School, Raffles Girls' Primary School, Nanyang Girls' High School, The Chinese High School, Anglo-Chinese School (International), Hwa Chong Institution and National Junior College.

"With all the surrounding good schools and proximity to lifestyle options and CBD, the location holds great appeal for families with school-going children and expatriates alike," said Edmund Tie & Company's senior director of investment advisory Tan Chun Ming. "URA's recent tender award of the Holland Village GLS (government land sale) site for a mixed-use and pedestrian-oriented development will also add to the vibrancy of the locale."

JLL senior consultant Karamjit Singh noted that the en bloc upswing from 2016 to 2018 year-to-date was led by the bottom-end of the private residential market as strong demand for mass-market homes and shortage of land kick-started the en bloc wave.

As land prices rose for the bottom end of the market, the upper tiers of the market are starting to look relatively under-priced. This in turn spurred en bloc sales in the medium to upper-end segments.

But he pointed out that prime land does not interest all types of developers. "Some would prefer mass market sites as they are good at building such homes. They also feel the size of demand for affordable homes is much wider as such projects mainly cater to HDB upgraders to whom additional buyer's stamp duty (ABSD) and total debt servicing ratio (TDSR) are less of an issue.

"On the other hand, developers who specialise in the luxury end would welcome opportunities to build what they are good at," Mr Singh said, adding that Singapore's luxury home market still compares favourably to several global peers, despite the ABSD payable by foreigners.

Savills Singapore senior director Alan Cheong noted that the flavour of the season has swung to prime districts as developers have stocked up their landbanks with suburban and city-fringe sites. The prime property owners have also been waiting for prices to rise before pushing their units for collective sale, he said.

Colliers International Singapore research head Tricia Song felt that the risk of an oversupply of launch units in the prime districts is low for now.

"We believe we are still in the early stages of recovery for the end-user and collective sale market for prime properties, especially given the dearth of prime land acquisitions between 2008-2017," she said.

"We believe prime sites, especially those located near an MRT station and are competitively priced, will continue to attract developers' attention."

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