SINGAPORE, 8 March 2022 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on URA and HDB land tenders.
The tenders by URA and HDB which closed today drew 7 and 9 bidders respectively, within our expectations of 7-10 bidders for each site. The top bids are just a notch below our expectations and suggest that the property market remains optimistic but is not overly exuberant. The cooling measures have anchored market expectations towards a sustainable trajectory, a win-win for all stakeholders
Sim Lian submitted the top bid of $347mn or $980.07 psf ppr for the Dairy Farm Walk tender. The site was hotly contested with the top three bids within 3% of each other. Developers remain confident in the suburban residential market which are likely to see sustained demand from first-time buyers and home upgraders. The site is located in a tranquil estate and one MRT stop away from the Beauty World area which is undergoing a rejuvenation. We expect that the development could be launched at around $1,780 psf, although the developer will have to be sensitive to the remaining inventory and pricing at neighbouring projects like Dairy Farm Residences and Midwood. Retirees downgrading their homes and desiring a relaxed and lush lifestyle are likely to be drawn to the area too.
A Qingjian and Santarli JV submitted the top bid of $266mn or $661.67 psf ppr for the Bukit Batok West Ave 8 EC tender, eclipsing the previous record price of 659 psf ppr set in July 2021 (also by the same JV). This site was also closely contested with the top three bids within 6% of each other. The lasted cooling measures are not likely to dent end-user demand for ECs, which offers a scarce and affordable proposition to aspiring private home upgraders. The site is located near the Le Quest Mall and residents will also be able to access the hawker centre within the upcoming public assisted-living project Harmony Village. We expect that the development could be launched at around $1,300 psf ppr on average, extending the uptrend in EC prices which currently are around $1,200 psf.
ENDS
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