Developers to continue to gravitate towards EC GLS tenders: experts

The $543.28m Tampines site bid is a testament to the strong demand for EC sites.

The result of the recently closed tender for Tampines Street 62 (Parcel B) shows that developers will continue to gravitate towards executive condominium (EC) Government Land Sales (GLS) tenders, real estate experts said.

The Housing Development Board (HDB) awarded the  Tampines EC site tender to Sim Lian Land and Sim Lian Development for $543.28m, which works out to a land rate of $721 psf per plot ratio based on the plot’s maximum gross floor area. The site received seven bids.

“ECs are generally seen as a safer bet amongst developers given the more stable demand pool for ECs,” said Wong Siew Ying, head of Research and Content at PropNex Realty.

Huttons Senior Director for Data Analytics, Lee Sze Teck, shared a similar sentiment, saying: “The EC market is attracting a lot of interest from developers as the past few EC launches have seen very strong sales. Copen Grand and Tenet are fully sold, while Altura is close to 90% sold.”

Lee added that the top bid of $721 psf ppr also “speaks of the confidence the developer has for ECs in Tampines.”

“Generally, EC sites in Tampines tend to have a slight premium over other locations. Furthermore, this area will be more attractive when the Cross Island line and a mixed-use development along Tampines Ave 11 is completed,” Lee said.

“It will benefit from the potential pool of more than 2,000 HDB flats which will reach its 5-year MOP in 2024 and 2025,” Lee added.

The strong interest towards EC GLS plots, however, can drive up land prices of ECs, said Wong.

“[This], in turn, could impact their affordability to the ‘sandwiched class’ for whom such housing is meant for,” said Wong.

“The higher land prices will put upward pressure on selling prices, which will then require buyers to potentially fork out more funds upfront to buy a new EC unit in the future. Transacted prices of new ECs touched a record high when the recently launched Altura EC in Bukit Batok clocked an average price of $1,474 psf as per caveats lodged,” he added.