Depleting land banks and a recent uplift in market sentiments may spark a brawl between property developers in Singapore, competing for the acquisition of 2 private residential sites which were launched for sale yesterday.
The 2 private residential plots are both on a 99-year lease term and have the potential to yield approximately 11,160 new homes.
Offered by URA under the 1H2017 Government Land Sales (GLS) programme, 1 of the sites is located at Lorong 1 Realty Park – within the Hougang precinct and is zoned for landed housing development. With a land area of around 144,237 square feet, the subject site is able to house approximately 50 landed homes with a maximum height of 3 storeys.
The other site is within Queenstown at Stirling Road, which was triggered for sale last week.
According to analysts, property developers are expected to bid aggressively for these 2 plots of land, especially for those who have not secure any new sites for the past 2 years and have been progressively selling offer their current stock.
The plot at Lorong 1 Realty Park could possibly draw approximately 10 to 32 bids, ranging between S$58 million ($400 psf) to S$82.2 million ($570 psf) based on the land area. And due to its relatively land area and the lack of sites for landed developments, this may be the more popular site among the two.
As for the site at Stirling Road, analysts are expecting a more subdued sentiment with 8 to 12 bids coming from property developers, despite the site being located in a well-favoured mature estate and next to an MRT station.
The existing supply at current projects Commonwealth Towers, Queens Peak and the upcoming project at Margaret Drive may be a concern for developers as well.
Analysts have added that the future new launch could be housing an estimate of 1,110 units, which may deter a couple of property developers as it may pose a challenge to build and sell every single unit within 5 years – due to the ABSD remission stapled deadline.
Given its huge scale, it’s being forecasted that some developers may form consortiums or joint ventures for the bidding of the site Stirling Road in order to lower the development risks involved.