Two additional 99-year leasehold residential sites were released for public tender yesterday — one at Hougang Avenue 2 from the Reserve List and one at Upper Serangoon Road from the Confirmed List.
According to URA, the Hougang Avenue 2 site was triggered by a property developer who agreed to bid a minimum price of $109.9 million for it, which is around $241 psf ppr.
Analysts said that the site could draw a top bid of about $310 psf ppr to $350 psf ppr once the tender is launched.
The second site, on the other hand, is located between Pheng Geck Avenue and Upper Serangoon Road. It is part of the Confirmed List under the Government Land Sales (GLS) programme for the first half of the year.
Analysts said that the 187,313-sq-ft land parcel in Upper Serangoon Road could fetch around $450 psf ppr to $560 psf ppr. This works out to a land cost of about $84 million to $105 million.
Li Hiaw Ho, executive director of CBRE Research, said that the site can be developed into a part low-rise or mid-rise condominium comprising of at least 150 units.
“It will be popular with home buyers and developers because of its location and proximity to an MRT station,” said Mr. Li. “As developers are still interested in acquiring sites, we expect it to be able to attract about 10 bids.”
Chua Chor Hoon, head of DTZ’s South-east Asia research team, said: “The successful tenderer is likely to build mainly small units on the site to capitalise on its proximity to the MRT. Investors would be attracted to buy them for leasing.”
She added that the recent sub-sales at 8@Woodleigh and 28 Woodsville ranged between $884 psf and $905 psf.
Eight major GLS residential sites, including an executive condominium site, will be sold between now and June 2010, and two more tenders are set to be launched soon, which could close by end-June.
Several analysts stressed that this is the highest concentration of GLS development land parcels in different locations offered for sale within a four-month period since the Reserve List System was introduced in 2001.
“The jury is still out on whether these 10 land tenders can continue to attract bullish bids or whether developers experience fatigue,” said Mr. Nicholas Mak, a real estate lecturer from Ngee Ann Polytechnic. “If the highest bids in subsequent tenders display a declining pattern, the government may have achieved the first step towards moderating private home prices by using supply-side measures.”
The tender for the site in Upper Serangoon Road/Pheng Geck Avenue closes on June 2, while the plot in Hougang Avenue 2 closes on May 20.