Sim Lian Group emerged at the top of just two bids received for the private residential site at Jalan Tembusu where the upcoming Emerald of Katong will be located, at the close of the Government Land Sale (GLS) tender on July 18 2023.
Sim Lian's bid of $828.8 million or $1,069 psf per plot ratio (psf ppr) for the Emerald of Katong at Jalan Tembusu land parcel was just $800,000 (0.1%) higher than the $828 million ($1,068 psf ppr) submitted by a joint venture between two listed developers, City Developments Ltd (CDL) and Frasers Property.
Jalan Tembusu is located just off Tanjong Katong Road in prime District 15. The 99-year leasehold site has a land area of 221,436 sq ft and a gross plot ratio of 3.5. The site can be developed into a new residential project of about 840 units based on a maximum gross floor area (GFA) of 775,034 sq ft.
This site is opposite the upcoming Tembusu Grand by a joint venture between CDL and MCL Land, which jointly won the site in January 2022 for $768 million or $1,302 psf ppr. There were eight bids at the close of that tender in January 2022, unlike just two in this latest tender.
"The government land sales (GLS) tender showed the cautious mood among developers in the face of economic uncertainties, high construction costs and interest rates," says Lee Sze Teck, senior director of research at Huttons Asia. Lee reckons the larger quantum and high-interest rate may have limited the number of bidders.
The top bid of $1,069 psf ppr by Sim Lian for the Jalan Tembusu site this time around is 17.9% lower than the $1,302 psf ppr paid by CDL and MCL Land for the Tembusu Grand site; and 20.8% lower than the $1,350 psf ppr won by SingHaiyi Group for the private residential development site on Dunman Road in a land tender in June 2022.
"The difference in the bid prices could be due to the changes in policies regarding the floor area harmonisation, which came into effect from June 1, 2023, and may result in smaller efficiencies," says Justin Quek, deputy CEO of OrangeTee. The harmonisation of gross floor area translates to an estimated drop in the saleable area by about 5%.
Tembusu Grand was launched over the weekend of April 7-8, 2023. About 53.3% or 340 out of 638 units were taken up at an average price of $2,465 psf on the launch weekend. Currently, 364 units (57.2%) have been sold at an average price of $2,464 psf, based on caveats lodged.
Meanwhile, just this past weekend (July 15-16), SingHaiyi launched the 1,008-unit Grand Dunman, which sits on the Dunman Road site it purchased in June 2022. The developer sold 550 (54.6%) units at an average price of about $2,500 psf.
Sim Lian's top bid of $1,069 psf ppr for the Emerald of Kovan Jalan Tembusu site gives the developer more flexibility in selling prices, says Leonard Tay, head of research for Knight Frank Singapore. "The possible selling price for the residential units at the Jalan Tembusu when ready for launch could start from $2,100 psf and average between $2,200 psf and $2,400 psf," he estimates.
The Emerald of Katong Jalan Tembusu site and an executive condo site at Tampines Street 62 (Parcel B) were launched for tender on March 14, 2023. These two sites can yield about 1,540 residential units and form part of the 4,090 residential units made available via the Confirmed List of the 1H2023 Government Land Sales (GLS) Programme. The number of units released in 1H2023 represents a 17% increase from the 3,505 units made available in 2H2022.
Article extracted from EdgeProp SIngapore (18 July, 2023)