By Mr Desmond Sim (沈振伦), Head of Research, Southeast Asia, CBRE
In light of the COVID-19 pandemic, the tender periods for these two sites were extended (to five months for Tanah Merah Kechil Link and six months for Yishun Ave 9) to provide developers additional time to make their bid assessments. However, these two sites will not be eligible for the 12-month extension in project completion period (PCP) as they were awarded after 1 June 2020.
Bidders’ interest is a strong reflection of the health prospects of the property market, egged on by low unsold inventory for both the private non-landed and EC markets; which has started the land banking process for most developers. The final bid prices for both sites reflect the developers’ outlook of the market in the midterm, or a post-pandemic climate.
Tanah Merah Kechil Link
Zoned as residential with commercial at first storey, this site is directly opposite Tanah Merah MRT station, which can yield just 265 residential units and around 21,000 sq ft of commercial space.
The site attracted 15 bids, with MCC Land being the highest tenderer at $930 psf ppr. It is a highly contested site, with the differential between the top two bids standing at only 4.6%.
The site has the potential to inject some retail vibrancy for the many residential projects around the area, as well as for commuters heading to the Expo or Changi.
Yishun Avenue 9 (EC)
The site attracted seven bids, the highest tenderer being Sing Holdings at $576 psf ppr. This is Sing Holdings’ re-entry into the EC market after an eight-year hiatus.
The healthy level of bids can be attributed to dwindling unsold EC stock which has dropped to 632 units this quarter, from the previous high of 829 units in Q1 2020. Furthermore, sales remain robust at nearby launches such as OLA and Parc Canberra, and EC stock remains limited as there has been no EC launched in Yishun since The Criterion and The Signature in 2015.
Yielding only 600 housing units, it is likely to be supported by demand arising from the upgraders’ market. This points to developers’ optimism in the long-term growth potential of Singapore’s residential market.
CBRE Research Views
Generally, both sites remain palatable in terms of total price quantum ($249 million for Tanah Merah Kechil Link and $374 million for Yishun Ave 9). This will encourage stronger bids from developers with greater land replenishment needs.
Given the environment of rising construction costs, the respective bid prices are likely to set new benchmark launch prices ($ psf) for their respective markets and asset classes in the future.
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