The most recent land sale under the 2H2015 Government Land Sales (GLS) Programme saw the plot next to Redhill MRT Station drawing 10 bids in total. The top bid of S$376.9 million (or S$851 psf ppr) came from Tang Skyline Pte. Ltd.
It was in fact one of the most heavily contested sites among property developers as the top 5 bids were all just within a 4.8% margin. The 2nd highest bid from UOL & Singland fell short by only a mere 1%.
However, it was also noted that developers are seemingly more cautious with their bids, due to the amount of unsold homes in nearby project launches, such as Alex Residences, The Crest, Mon Jervois and the latest Principal Garden.
As of September, here are the number of unsold units at some of the above-mentioned new launch projects.
|Project Name||No. of unsold units|
Earlier this month in November 2015, Principal Garden sold only 120 units, out of the 663 units in total.
Being quite a distance from Redhill MRT Station, the land parcel which Principal Garden is sitting on, managed to fetch S$821 psf ppr back in April 2014. This is only S$30 psf ppr cheaper than the top bid submitted for this latest parcel next to Redhill MRT Station.
What’s even more worrying, especially for property developer Singland Homes, is the fact that they bought the adjacent land parcel (which is currently developing Alex Residences) next to Redhill MRT Station for S$970 psf ppr in December 2012. That’s a staggering difference of S$119 psf ppr.
From the above comparison, it has clearly shown how much have land prices declined within the Redhill vicinity.
According to analysts, the estimated breakeven price for this new development by Tang Skyline (if bid is successful) should be within the range of S$1,350 psf to approximately S$1,400 psf. This will give developer a good buffer in terms of profit margin with staying competitive with the rest of the new launch projects in the Redhill area, which are selling within a psf price of S$1,530 psf to as high as S$1,950 psf.
An “added bonus” to this future development will be the commercial component on the 1st floor. It was noted that an estimated commercial space of 2,000 square meters (sqm) will be developed for shop spaces, cafes and also restaurants.
Unlike most heartland malls located at town centres where it draws crowd from other neighbouring estates and create a rowdy environment, this new mixed development will offer residents a sufficient amount of retail options, daily necessities and other amenities, yet preserving a peaceful environment.
It was previous mentioned by the Urban Redevelopment Authority (URA) of Singapore that this latest land parcel is expected to yield an estimate of 400 private residential units.