The public tender for an executive condominium (EC) site located at Jurong West has failed to attract any bidders, contrary to experts’ prediction that it would have at least two to three bidders.
Bids for the 99-year leasehold EC site were tipped at around $230 psf ppr to $300 psf ppr, valuing it at approximately $125 million to $163 million, following the strong interest in EC tenders this year. Some property experts said that the failed tender for the site indicated that developers are becoming selective, as more land sites will be released for sale. The site also seems to be a victim of the government’s decision to push out a record amount of land for sale in the second half of 2010.
According to some experts, the EC site is not that appealing and aside from being next to the expressway, no amenities are present near the site.
“If the site is not attractive, developers would presume that it would be difficult to sell. So why take the risk?” said Eugene Lim, associate director of ERA Asia-Pacific.
Mr. Nicholas Mak, a real estate lecturer from Ngee Ann Polytechnic, told the Strait Times that developers will be more cautious with sites where they see limited pricing flexibility. ECs are aimed at households with a gross monthly income ceiling of $10,000, so developers would want to price units at below a million each, he said. They should cost at least 10 to 15 percent less than a private mass market condo unit.