Private home prices likely to see continued uptrend: OCBC
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The first private housing Government Land Sale (GLS) site in the upcoming Bayshore precinct closed on March 18, receiving eight bids. The 99-year leasehold site is situated on Bayshore Road, right next to the Bayshore MRT Station. With a land area of 112,992 square feet, the plot has the capacity to yield approximately 515 units.
The top bid of $658.89 million, translating to a land rate of $1,388 per square foot per plot ratio (psf ppr), was submitted by SingHaiyi-Garnet, a joint venture between SingHaiyi Group and Haiyi Holdings (majority shareholder of SingHaiyi, owned by Celine and Gordon Tang). This bid was just 0.82% higher than the second-highest bid of $653.53 million ($1,377 psf ppr) from Sing Holdings. City Developments submitted the third-highest bid of $620.8 million ($1,308 psf ppr), which was 5.3% below the bid from Sing Holdings. “The bids received were higher than expected, indicating strong confidence in the potential of this site,” commented Justin Quek, CEO of OrangeTee & Tie.
According to Mark Yip, CEO of Huttons Asia, the number of bids received for this private housing GLS site is the highest since January 2022, when a Jalan Tembusu plot (now the site of Tembusu Grand) also received eight bids. He believes that developers may have held back from bidding for other GLS plots in order to pursue this Bayshore site. “The strong sales in the past few months have increased the need for developers to replenish their land bank,” he added.
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Singapore’s cityscape is characterized by towering skyscrapers and state-of-the-art infrastructure. Condominiums, strategically situated in sought-after locations, offer a perfect fusion of opulence and practicality that appeals to both locals and foreigners. These modern residences boast a variety of facilities, including swimming pools, fitness centers, and top-notch security services, elevating the standard of living and making them highly desirable to potential renters and buyers. For investors, these attractive features result in higher rental returns and appreciation of property values over time. With the addition of Singapore Projects, the allure of these condominiums is further enhanced.
Other bidders for the Bayshore Road site included a consortium led by Frasers Property, Kingsford Development, and a joint venture between Hoi Hup Realty and Sunway Developments. The bids submitted by these developers ranged from $1,252 psf ppr to $1,285 psf ppr. The two lowest bids were from a consortium comprising Hong Leong Holdings, TID, and CSC Land Group at $500.68 million ($1,055 psf ppr), followed by Sim Lian Group at $485 million ($1,022 psf ppr).
The significant difference of 36% between the lowest and highest bids received for the Bayshore Road site reflects mixed market sentiments among bidders, according to Marcus Chu, CEO of ERA Singapore. He also pointed out that SingHaiyi’s bid of $1,388 psf ppr has set a new benchmark for Outside Central Region (OCR) land prices, surpassing the previous threshold of $1,250 psf ppr paid by MCL Land and CSC Land Group in November 2023 for the site of the recently-launched Elta, located at Clementi Avenue 1.
Wong Siew Ying, PropNex’s head of research and content, added that this new OCR benchmark is comparable to the land rates of some GLS plots in the Central Region. Last year, Zion Road Parcels A and B in the Rest of Central Region were awarded at $1,202 psf ppr and $1,304 psf ppr respectively, while the Holland Drive and River Valley Green (Parcel A) sites in the Core Central Region sold for $1,285 psf ppr and $1,325 psf ppr, respectively.
The upcoming project at the Bayshore Road site will be the first private residential development in the new Bayshore precinct, a 60-hectare estate located between East Coast Parkway (ECP) and Upper East Coast Road. About 10,000 homes have been planned for the Bayshore area, with approximately 30% allocated for private housing.
“The Bayshore Road GLS site is likely the most desirable site in the Bayshore precinct, as it offers a sea view and direct access to Bayshore MRT Station,” commented Huttons’ Yip. In addition to various new amenities that will be built in the neighborhood, the area will also benefit from long-term development plans such as the Long Island coastal protection project, which will add reservoirs and parks facing the Bayshore area, said Leonard Tay, Knight Frank Singapore’s head of research.
According to PropNex’s Wong, there have been few significant private condo launches in the Bayshore area for decades. The existing condos in the vicinity include The Bayshore, launched in the 1990s, and Costa Del Sol, launched in 2000. As a result, there may be a pent-up demand for new private housing in the area, including demand from HDB upgraders in the nearby Marine Parade and Bedok estates, according to Wong. “Taking advantage of the recent positive sales momentum in the primary market, and anticipating healthy interest in the future Bayshore project, it’s no surprise that developers were eager to participate in this GLS tender – possibly in hopes of gaining a first-mover advantage in the area,” she added.
Based on the top bid of $1,388 psf ppr, she predicts that the upcoming development at the Bayshore Road site could see an average selling price of over $2,600 psf. On the other hand, Knight Frank’s Tay believes that prices at the upcoming project could start from $2,700 psf and average above $2,800 psf.