THE Urban Redevelopment Authority (URA) on Thursday (Sep 12) released a Faber Walk residential site in Clementi for sale under the second half of the 2024 government land sales (GLS) programme.
Analysts reckoned that developers will remain conservative in bidding for the site, as with recent tender exercises, given the market saturation as private housing supply ramps up.
The land parcel launched for sale is on the confirmed list. Confirmed list sites are launched according to schedule regardless of demand. Sites on the reserve list, however, are put up for tender only when a developer makes an offer acceptable to the government.
The 25,795.5 square metre (sq m) site is expected to yield 400 residential units. This will be capped at 403 to keep traffic flow in the area manageable, said URA.
The site has a maximum gross floor area of 36,114 sq m and a 99-year lease.
In a Thursday statement, URA said the 400 units on this site will be part of the 5,050 homes to be released under the second half of the 2024 GLS programme.
A NEWSLETTER FOR YOU
Tuesday, 12 pm
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
“The government will continue to release a steady supply of private residential units in coming GLS programmes, with the supply calibrated to account for prevailing economic and property market conditions,” it added.
Mixed demand
Mark Yip, chief executive of Huttons Asia, said there may be pent-up demand for private housing projects in the area, since the Faber Walk GLS site is the last parcel of land in the private residential enclave.
Demand may come from landed homeowners looking to right-size their home, or those in multi-generation families seeking homes within the same project, said ERA chief executive officer Marcus Chu.
The location is also desirable, despite being in the suburbs, thanks to its proximity to various educational institutions and the upcoming Jurong Lake District, he said.
Justin Quek, chief executive at OrangeTee & Tie, noted that the last state-land site launched for sale in the Faber Walk area was for West Coast Vale – where the 716-unit Whistler Grand condominium now sits – in December 2017. It is located just across the Ayer-Rajah Expressway from the Faber Walk site.
The land parcel in West Coast Vale drew six bids when the tender closed in January 2018, with a top bid of S$472.4 million or S$800 per square foot per plot ratio (psf ppr) from City Developments Limited.
Whistler Grand condo was launched at an average selling price of S$1,380 psf in October that year.
Caveats data also showed that resale prices in the Faber Walk area have ranged between S$760,000 (S$S1,642 psf) and S$2.6 million (S$1,726 psf) in the past few months. The latest transaction was for a 603 square foot unit in Parc Riviera for S$1 million or S$1,692 psf in late August.
Still, market watchers predict that the site will draw moderate demand from developers, attracting up to three bids. They expect the highest bid to come in at between S$750 and S$850 psf ppr.
ERA’s Chu said recent tender exercises indicate a lack of market confidence among developers.
The latest state land tender for a Margaret Drive site attracted just two bids, despite its location in an area popular with homebuyers. The top bid came from Hong Leong units and GuocoLand at S$497 million or S$S1,154 psf ppr – around 5 per cent higher than Sing Holdings’ bid of S$S473.6 million or S$1,100 psf ppr.
Chu said: “Compared to previous tenders, this GLS site’s location may not be as attractive, given that there are more appealing sites (on the market), such as Bayshore, Chuan Grove and Chencharu, which are supported by dense housing enclaves.”
There are also several existing and upcoming projects that could dilute sales, he added. “With a saturated market and simmering uncertainty for better GLS locations, developers may choose to withhold bids, for more calculated moves to compete for other upcoming sites.”
Additionally, Quek of OrangeTee noted that the site’s limit of 403 residential units, as well as its low-rise and lower density, could add to developers’ list of considerations when assessing its potential.
The tender for the land parcel at Faber Walk closes at noon on Nov 19.
