Why GLS tenders for EC sites like Plantation Close attract more developers

The Plantation Close EC site received nine bids.

The latest executive condominium (EC) site under the Government Land Sales (GLS) programme, Plantation Close, saw an “attractive participation” for nine developers.

Real estate experts said the latest GLS tender results are “not surprising” since many developers are still being “cautious” about their projects.

“ECs are seen as a haven of sorts, given their more stable demand pool amongst owner-occupiers,” Wong Siew Ying, head of Research and Content at PropNex Realty, said.

Huttons’ Senior Director of Data Analytics, Lee Sze Teck shared a similar sentiment saying that the high number of bidders for the site “may be a move to enter a market that is more stable and well-supported despite the narrower margins”

“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,” Lee added.

Apart from ECs being a haven to developers, Wong believes that developers’ confidence in the Plantation Close site was “bolstered by the robust sales at Copen Grand EC in nearby Tengah Garden Walk last year.”

To recall, the 639-unit Copen Grand EC sold 73% of its total units over its launch weekend in October and is now fully sold with an overall average price of about $1,340 psf.

“In addition, the Plantation Close EC site’s location in a new up-and-coming housing precinct, proximity to two future MRT stations, the lower supply of unsold new EC units on the market, as well as healthy take-up at Altura EC recently further boosted the appeal of this EC plot,” Wong said.

Given that the winning bid for the site translates to $703 psf ppr, Wong anticipates that the average selling price for the future Plantation Close EC project may hover at around $1,500 psf.