URA closes tenders for sites at Canberra Drive and Fernvale Lane

A Canberra Drive site got the highest bid of $644 psf ppr from Oasis Development.

The Urban Redevelopment Authority (URA) closed tenders for two residential sites at Canberra Drive and one site at Fernvale Lane, according to an announcement.

The two sites at Canberra Drive attracted a top bid of $644 psf ppr and $650 psf ppr from Oasis Development and United Venture, respectively. Their public tender was launched on 28 November 2019.

Lee Sze Teck, director for research at Huttons Asia, commented that the bids are within expectations and probably took cues from the average selling price of Parc Canberra. 

“We noticed that the same group of developers participated in both sites submitting bids that are close probably to average out the land costs in the event they are the top bidders for both sites,” he said.

Desmond Sim, head of research for Southeast Asia at CBRE, noted that the sites were initially put on the Reserve List of the first half of the 2019 GLS programme as a single plot, but are now split into two parcels on the confirmed list. “This will ensure that the sites are more digestible and will appeal to more developers,” he said.

Christine Li, head of research in Singapore & Southeast Asia at Cushman & Wakefield, was more negative and noted that the top bids for Canberra Parcel A and B are slightly below expectation.

“This could mean that developers are prepared for either higher construction costs or slightly lower selling prices in the event that prices do not match up to expectation due to the implications from the virus outbreak. Material costs have shot up quite significantly recently due to the global supply chain disruption and there could be construction delays amid manpower crunch. Developers might be looking for a bigger buffer for their projects in anticipation of these events,” Li said.

The first parcel of land has a site area of 13,315.3 sqm and maximum gross floor area (GFA) of 18,642 sqm. The second parcel of land has a site area of 27,566.1 sqm and a maximum GFA of 38,593 sqm.

Parcel B is almost twice as large, yielding up to 455 units, whilst Parcel A can yield 220 units.

“The sites are attractive considering their proximity to Canberra MRT station, Sembawang Shopping Centre and Sun Plaza,” Sim added.

Bids for Fernvale Lane site
Frasers Property submitted the top bid of $555 psf ppr for the executive condominium (EC) site at Fernvale Lane.

This site is most likely in tandem with the increased demand for ECs after the qualifying income ceiling was raised to $16,000 from $14,000 in September last year, Sim noted. Another site in Tampines Street 62 was also released for application, but under the reserve list.

Although no MRT station is nearby, it is still near amenities such as Greenwich V shopping mall. “The site may also appeal to HDB upgraders in Sengkang and Punggol, with at least 10,000 flats in these areas reaching their five-year minimum occupation period,” Sim added.

Huttons’ Lee concurred and said the strong interest and sales in Parc Canberra shows there is unmet demand for EC projects in the market. “Furthermore the last EC launch in the area was in 2012 and there are a few thousand flats in Sengkang which has or will pass the minimum occupation period in 2021. This will form the potential pool of eligible buyers for the EC project,” he added.

However, C&W’s Li noted that the top bid for the EC site is about 4% lower than the previous bid for the EC site at Anchorvale Crescent (also known as Ola, which is being marketed currently), which was awarded to EVIA-led JV in September 2018.

“This is surprising, considering EC is a sure-sell product in the current market and there is no lack of buyers. The recent sales at Parc Canberra (which sold 64% or 316 units over the first weekend) and high e-application of 1200 for Ola surprisingly did not boost developer’s appetite for this site,” she said.