ERA Daily Research - 28 May

URA, HDB release Jalan Tembusu, Tampines Street 62 residential sites for sale

The Business Times, 28 May 2021, Fri  

By Vivienne Tay

THE Urban Redevelopment Authority (URA) and the Housing & Development Board (HDB) on Thursday released residential land parcels in Jalan Tembusu and Tampines Street 62 for sale.

The sites, which have a lease period of 99 years, are on the reserve list in the first half 2021 government land sales programme. They are available for application and can yield about 1,340 residential units, URA and HDB said in a joint statement.

The URA site at Jalan Tembusu, off Haig Road in Katong, is expected to yield 640 units. It has a site area of 19,567.6 square metres (sq m) and maximum gross floor area (GFA) of 54,790 sq m. The maximum building height is 70-75 metres Singapore height datum (SHD).

Ong Teck Hui, JLL senior director of research and consultancy, noted that the site is within walking distance of the upcoming Tanjong Katong MRT station and near the popular East Coast Park. It is also near schools such as Tanjong Katong Girls' School and Tanjong Katong Primary School, he added.

However, analysts were mixed on the probability of the Jalan Tembusu plot being triggered for sale.

Reserve list sites are put up for tender when a developer makes an offer acceptable to the government. This is in contrast to confirmed list sites, which are launched according to schedule, regardless of demand.

Huttons Asia chief executive Mark Yip believes the Jalan Tembusu plot has a high probability of getting triggered as developers are starved of well-located sites. The plot is in District 15, a popular area for many buyers, he said. It also offers unblocked views as homes in the vicinity are predominantly low-rise developments, he added.

ERA Realty head of research and consultancy Nicholas Mak said, however, that although the plot is attractive, it demands a bigger commitment from developers, given that more than 600 units can be developed on it.

"Given the uncertain Covid-19 situation and risk of cooling measures, developers may be hesitant to trigger this private residential land plot for tender," he said.

If triggered for sale, property analysts are projecting a top bid of about S$1,100 to S$1,500 per square foot per plot ratio (psf ppr) for the site.

JLL's Mr Ong said the plot may attract 10 to 15 bidders.

Over at Tampines Street 62, the subject site, Parcel B, is expected to yield about 700 executive condominium (EC) units.

The plot is about 28,000 sq m and has a maximum GFA of 70,001 sq m. The maximum building height is 64 metres SHD.

Huttons Asia director of research Lee Sze Teck said EC sites are a good alternative to private residential living and are seldom subject to cooling measures from the authorities.

"In this Covid-19 environment, where the supply of labour is uncertain, the 15-month time bar on EC actually helps. Developers can delay appointing a contractor till the situation is more stable," he said.

Developers of ECs are required to wait 15 months before putting the units on sale; the measure is intended to encourage developers to bid more prudently for EC sites.

Mr Lee said Parcel B site is unlikely to be triggered for sale even though it is in a mature estate. This is because the neighbouring Parcel A site - launched just last month - has yet to be sold and developers would want to spread out the launch of projects, as well as "have a feel" of the land bid for Parcel A.

If triggered for sale, analysts estimate the top bid for the site will be between S$550 and S$620 psf ppr.

Mr Ong said there could be seven to 10 parties bidding for the plot.


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