A recent Government Land Sales (GLS) tender closed on two 99-year-leased private residential sites adjacent to the Beauty World and Hillview MRT stations. The highest bids received for the two sites were within the expected range as indicated by real estate consultants polled by The Business Times prior to the close of bidding on both sites on Thursday (3 November).
The Hillview Rise plot, with a potential to build around 335 homes, received four bids. A partnership of Far East Organisation and Sekisui House placed the highest bid at a total of $320.78 million, which is almost $1,024 per square foot per plot ratio (PSF per PPR). The site along the Bukit Timah Link, just a stone’s throw away from The Reserve Residences, above Beauty World MRT Station, attracted five bids.
Bukit Sembawang Estates highest bid, at $200m, or $1,343.13psf – was 15.7% higher than Wing Tai’s second highest. Says JLL Singapores Senior Director of Research & Consultancy, Ong Teck Hui: It was thought the Bukit Timah Link site, being relatively smaller and thus less risky, would attract a lot of interest among developers, yet it was bid on by just five parties. The highest bid, though, was far more optimistic than the second highest.
While the unsold units stock remains low, and developers have an urgent need to fill up land banks, the bidding on sites seems to have been very cautious given rising interest rates, the impact of recent cooling measures, and macroeconomic uncertainties”. This is the first time that bidding has closed since the implementation of property cooling measures at the end of September.
Also noting a more cautious approach by real estate developers, Nicholas Mak, research and consulting manager of the real estate network ERA, said that the highest offer for Hillview Rise, S$1,023.85 psf ppr, was lower than the land price of S$1,068 psf ppr paid for a nearby condo development site, Midwood, in 2018.
Lower Land Cost at Dairy Farm Walk GLS
“The distance between the Midwood site and Hillview Rise is just around 230 metres,” he added. The highest bid of $1,023.85 psf ppr, for the latest Hillview Rise site was just 1.3% higher than the second highest bid, from City Developments. Edmund Tie Research & Consulting Head Lam Chorn Woon said that a reason behind the relatively tight bidding on the site may be the developers concern over the competition in terms of supply and prices with future developments like The Botany at Dairy Farm at Dairy Farm Walk, where Sim Lian Group was awarded at a considerably lower S$980 psf ppr in March this year.
Despite that, developers are still eager to secure land in order to deliver new projects in the currently scarce private housing market. These are challenging times for developers, in fact, having to manage risks from higher building costs, from state intervention through cooling measures, from paying non-responsible Additional Buyers Stamp Duties (ABSD), and also from having to sell in five years to avoid being responsible for yet more ABSD. Another deterrent to developers is a revised floor area definition that includes ledges with air-conditioning units as gross floor area; this change will chew away at developers saleable area and profit margins on condominium projects”. Also, as interest rates rise, developers must now factor in if some homebuyers are going to be camping out, taking a watch-and-wait approach until economic uncertainties clear up, Tai added.
Tricia Song, CBREs Head of Research in Southeast Asia, forecasts that launch prices for the new projects to be launched at a cost of between S$1,800-S$1900 per square foot (PSF) for those coming on the Hillview Rise site, while the launch prices of new projects at Bukit Timah Link sites are expected at between S$2,200-$2300 psf. Chng Kiong Huat, managing director at Bukit Sembawang, which is the main bidder on the Bukit Timah Link plot, said: “We are planning to create a cosmopolitan village lifestyle in the 20-storey, 160-units, which we think would attract younger families and investors. This lifestyle concept will be a good fit to the location, with its village feel, and would offer a compelling choice to buyers looking for a unique lifestyle while enjoying the gentrification and redevelopment right next to The Reserve Residences, a integrated-mixed used project coming up in 2023″.
Within walking distance from the property are the Bukit Timah Nature Reserve and the Bukit Batok Nature Park, and a variety of retail and dining options. Mark Boey, managing director, Far East Organisation, speaking on behalf of the joint venture between the firm and Sekisui House, said that Hillview Rise site presented an “excellent opportunity for both of us to build yet another outstanding residential project within the Upper Bukit Timah area”. The partners proposed scheme for the Hillview Rise site would consist of two blocks, each of 27 stories, and contain approximately 330 homes.
Located in a matured private housing development, the Hillview Rise site is readily accessible by major roads/expressways, as well as the Hillview MRT Station. Schools like CHIJ Our Lady Queen of Peace and Assumption English School are located nearby. Shopping malls like The Rail Mall and HillV2 offer a variety of nearby shopping, dining, and entertainment options. The site is next to the Hillview Community Club, as well as close to the Bukit Batok Nature Park.