Analysts expect heated competition over sale of Kampong Java Road site

It was launched in the Confirmed List of the Government Land Sales programme.

Singapore has launched several residential sites in the Confirmed List of its H2 2018 Government Land Sales (GLS) programme. Analysts are mostly bullish on the interest the sites will garner.

Kampong Java Road
OrangeTee & Tie head of research & consultancy Christine Sun noted that Kampong Java Road is at the heart of District 9 just opposite Newton MRT station. “There has not been a GLS site sold in this area for a while,” she said.

Sun expects this to be the most highly contested area, estimating more than 15 bidders for this site. Based on the en bloc sale of Makeway View, she said the 99-year leasehold site could be sold around $1,400-1,600 psf at an expected selling price of around $2,300 -$2,500 psf.

Colliers Singapore head of research Tricia Song added that the site would appeal to both local and foreign developers. She based this on “the strong response to the sale of prime sites on the collective sale market as well as recent GLS site tenders, such as in Fourth Avenue, Jiak Kim Street, Handy Road, and Cuscaden Road.”

Tampines Avenue 10
The only executive condominium (EC) plot to feature in the Confirmed List – Tampines Ave 10 - was brought over from the Reserve List of GLS H1 2018, Song noted.

“There are a few private condominiums that are newly built in the vicinity and the take-up has been very healthy for these projects when they were launched,” Sun said. “Almost all these projects are fully sold except for the new project Tapestry, which is still seeing strong ongoing sales.”

She added that the healthy demand in that area will possibly attract more than 10 bidders for this site. As a gauge, the recent Sumang Walk EC had 17 bidders. Based on prices of Tapestry and the Sumang Walk EC site, the bid price for this site could play around $580-600 psf ppr.

Sims Drive
Another site, Sims Drive, is walkable to Aljunied MRT station, close to the city centre and near Paya Lebar Central which is envisioned to be the next upcoming commercial cluster by 2030, Sun noted.

“The disadvantage of the site is that it fronts the PIE that can be noisy and dusty for some owners. We expect about 10 to 15 bidders for this site at a possible bid price of about $1,000 - $1100 psf ppr,” she said.

Middle Road and Tan Quee Lan Street
The site at Middle Road also stood out to both Song and Sun.
“This site is located right at the downtown core and is near the Bugis MRT station, Bugis Junction, Suntec city etc. We foresee that this site would be popular as well,” Sun said.

Song added that it, along with the plot in Tan Quee Lan Street, could attract interest. “Located near the Beach Road White Site tendered in end-2016, both sites are likely to supplement the housing demand in the up-and-coming Beach Road commercial enclave,” she added.

She expects a top bid of $1,400-$1,500 psf ppr for each site or about $500m for Middle Road and $800m for the Tan Quee Lan Street plot.

“Taken together, we think this slate of sites will complement the collective sale market, offering a good selection of land for developers as the Government continues to work at ensuring a stable and sustainable property market,” Song concluded.