THE Government yesterday launched three mass market residential sites for sale and cut from six to five years the time developers have to complete a housing project.

The sites – in Hougang Avenue 7, at the corner of Punggol Drive and Punggol East, and the junction of Pasir Ris Drive 3 and Pasir Ris Drive 4 – are expected to yield about 1,260 units. Their tenders close separately next month.

The three 99-year leasehold plots are the first to have the new five-year project completion period for private residential sale sites applied to them.

From today, all such sites released for sale will have to conform to the new rule, which is to ‘further ensure more timely supply of private housing to meet demand’, said the Housing Board in a statement yesterday.

Experts believe the change – it does not apply to executive condominium (EC) sites which have to be built in four years – will not have a major impact on the market.

Cushman & Wakefield managing director Donald Han said: ‘In a peak market like now, it’s not a problem at all. Developers usually take three to four years to build a mass market condo.

‘It’s just a precautionary measure. The Government just wants to ensure that what has been tendered out will be completed in five years, so that supply can meet demand.’

Experts note that few developers want to take too long to build on leasehold sites.

‘Based on development trends in the last eight years, we found that the actual completion period for sale sites for private residential developments was generally about four years on average,’ said the Urban Redevelopment Authority (URA). Only about 13 per cent of these projects took longer than five years to complete, it said.

Prior to 1997, the project completion period for government residential sites was four to five years. It was extended to eight years in late 1997 due to the then economic crisis, said the URA.

This was cut to six years in 1999 and has remained so, although the Government in last year’s Budget allowed developers to apply to extend completion periods by up to one year with applications having to be made by Jan 21 this year.

Of the sites launched yesterday, the Hougang plot is 15,630 sq m in size with a maximum gross floor area of 43,765 sq m.

The Punggol site is 15,700 sq m in size with an allowable gross floor area of 53,380 sq m. It is earmarked for executive condos and is near Kadaloor LRT station.

The Pasir Ris plot is a short distance from NTUC Downtown East, has a site area of some 20,000 sq m and an allowable gross floor area of 42,000 sq m.

Ngee Ann Polytechnic lecturer Nicholas Mak predicted that the sites would attract less aggressive bids given that they are not near MRT stations.

The Hougang site may attract bids of $320-$370 per sq ft per plot ratio (psf ppr), while the one at Pasir Ris may garner bids of $350-$390 psf ppr, he said. The Punggol EC plot, being in a new estate, may draw bids of $250-$290 psf ppr, added Mr Mak.

Source: Straits Times, 5 Aug 2010

A PRIME multi-purpose site in the Central Business District has been put up for tender.

The 1.5ha plot at the corner of Peck Seah and Choon Guan streets and next to Tanjong Pagar MRT station was launched yesterday as a confirmed list site.

The development will have a gross floor area of 157,744 sq m with at least 60 per cent earmarked for offices and a minimum of 10 per cent for hotel-related use.

The remaining area can be used for commercial, hotel or residential purposes, said the Urban Redevelopment Authority (URA) yesterday.

The 99-year leasehold site could yield an estimated 490 apartments, 315 hotel rooms and 102,380 sq m of commercial space.

It could reach 280m above sea level, commanding panoramic views of the city skyline across the CBD to Marina Bay and Chinatown, the URA said.

An underground pedestrian network will link the site to Capital Tower and 8 Shenton Way.

Executive director Li Hiaw Ho of CBRE Research said the development will tower over others in the vicinity and change the landscape of the Tanjong Pagar micro-market, hastening the area’s pace of rejuvenation.

Mr Li said that with inner-city living growing in popularity over recent years, the successful tenderer would be tempted to utilise the remaining 30 per cent of floor space for flats.

Caveats lodged in the past six months from new launches at Altez and 76 Shenton ranged from $1,900 to $2,300 per sq ft (psf) while the completed Icon project has had recent resale transactions from $1,600 to $1,700 psf, CBRE Research said.

Knight Frank consultancy and research manager Ong Kah Seng expects ‘keen interest’ and about five bids for the prime site.

He also highlighted the attractiveness of the Tanjong Pagar area, where ‘prime commercial area is complemented by a variety of lifestyle amenities and entertainment hangouts’.

Mr Ong added that with the office market in early recovery, this presents the best opportunity to develop or invest, as rents and prices are still attractive and economic fundamentals are in sight.

‘Developers also have better access to financing compared to during an economic downturn,’ he added.

The site, which can take up to seven years to be fully developed, might also appeal to developers who prefer a cautious stance as they would be able to adjust development plans according to prevailing market conditions, Mr Ong added.

The tender, which is part of the Government’s land sales programme, closes on Nov 16.

Source: Straits Times, 31 Jul 2010

Cash-rich firms spot growth opportunity here as cooling steps take effect at home

CHINESE developers eager for a slice of the red-hot housing pie are nudging their way into Singapore’s property scene.

Chinese developers bid for at least 10 out of the 15 residential land sites put up for tender in the Government Land Sales (GLS) programme for the first half of this year.

They have landed three plots and narrowly missed out with second-place bids on at least two other sites.

MCC Land and Qingjian Group are two of the most active, although lesser-known Ningbo Construction Group unsuccessfully bid for a private residential plot in Tampines Road in May.

Property experts say this might herald a growing trend as Chinese developers, cashed up and eager to mitigate cooling measures that could derail property prices in China, shift their focus to Singapore where prices are expected to keep rising.

Their aggressive bidding could also be due to their lack of a landbank compared with local developers, and that many of their initial bids had failed to top the tender, experts say.

Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said: ‘Singapore is preferred as it is seen as a stable and safe market.

‘Chinese developers will probably expand their presence here and I won’t be surprised if we see more mainland firms coming into the property market.’

DMG & Partners property analyst Brandon Lee said that as most of the Chinese firms started out in the construction business, progressing to property development was not surprising as the margins were much higher.

‘There are also an increasing number of mainland Chinese buyers entering the market, making up about 15 per cent of total foreign buyers, so the Chinese developers might be hoping to target this segment,’ he added.

MCC Land’s first attempt at a GLS tender was in March, for an executive condo site near Buangkok MRT Station. It fell a fraction short, tendering 1.4 per cent below the top bid of $193.3 million.

But it won the day with a $127.8 million bid for a site at Yishun, also in March. Last month, the firm clinched a Sembawang Road/Canberra Drive site for $131.7 million.

MCC Land is part of the Chinese state-owned enterprise Metallurgical Corporation of China (MCC Group) – a Fortune 500 company listed on the Shanghai and Hong Kong bourses. It is involved in engineering, procurement and construction, mining and property development.

While MCC Land is a new entrant, MCC Group’s local construction unit, China Jingye Engineering Corporation, has been doing business here for almost 14 years. It was the main contractor for Universal Studios at Resorts World Sentosa.

MCC Land managing director Tan Zhiyong said that it was a natural progression to branch out into property development as it expanded its footprint here.

Although the firm is mostly involved in the residential market, he does not rule out entering the commercial sector if the opportunity arises.

‘We don’t have a fixed goal in terms of what we want to accomplish… If a good opportunity arises, we will act but this also depends on how the market moves, the timing and the location of a site,’ he said.

Mr Tan added that while he does not expect property prices here to increase as fast in the rest of the year as they did in the first half, he expects values to remain stable and so might bid for more sites.

The other main player – the Qingjian group – also began operations here as a contractor for HDB projects. It marked its first foray into property development in 2008 with Natura Loft – an HDB design, build and sell scheme in Bishan.

Qingdao Construction – part of the Qingjian Group – has since clinched a site next to Potong Pasir MRT station for $113.7 million. Its bid of $607 per sq ft per plot ratio was a record land price for the area and ahead of more established property players like Frasers Centrepoint, Far East Organization and Hong Leong Holdings.

Qingdao Construction director Zuo Haibin said Singapore’s growing economy provided a stable investment platform. He hopes to at least double the size of the firm’s development arm in the next year and has identified sites in the upcoming GLS programme the firm may bid for.

Source: Straits Times, 26 Jul 2010