The higher risks and thinner margins for developers meant they are highly selective of the sites they want to secure. Furthermore, a number of mid to large sized developers have secured land in the past 12 months. Some developers may want to reserve their cash for other attractive sites in the 2H 2023 GLS programme. The cooling measures may direct more interest to OCR and RCR sites. The harmonization of GFA will result in lower land bids as it reduces the saleable area. It is likely that 1 to 5 bidders for private residential sites may be the norm.
The Marina Gardens Lane site attracted 3 bidders and a top bid of $1,402 psf ppr. The wide range between the bids reflects the difficulties in determining a fair value for a prime city-fringe site in a relatively untested area. The developer will have a first mover advantage and this is the only Marina South precinct site with a direct access to the Marina South MRT station. Buyers can tap on the potential pool of tenants working in the CBD.
The integrated transport hub site at Tampines Ave 11 saw a top bid of $885 psf ppr from 3 bidders. ITH are favoured by buyers for its convenience, rarity and its capital appreciation and rentability. The Reserve Residences, a recent ITH project, sold more than 70% on its first weekend. This attests to the popularity and hence the competitive bid for the site. The retail mall could eventually be offloaded to a retail REIT once the rental income stabilises.
The Plantation Close EC site saw active participation from 9 developers. The high number of bidders may be a move to enter a market that is more stable and well-supported despite the narrower margins. The recent 2 EC launches have sold very well. Copen Grand in Tengah was fully sold within one month of its launch while Tenet sold 93% after the balloting for second-timers. ECs offer an attractive alternative and with the recent increase in ABSD for a second property purchase, ECs are likely to see more interest as they are given upfront remission. The Plantation Close site is less than a 5 min walk to the future Tengah Park MRT station on the Jurong Region Line and will bring residents to the second CBD at Jurong East in less than 10 mins. EC sites within proximity to MRT stations are rare and tend to do well. The popular Princess Elizabeth Primary School is within 1km of the site.