MCL Land top bidder in two EC site tenders

Bids for sites in Choa Chu Kang Grove show developers’ confidence that hybrid housing type remains popular
Published: 1:50 AM, February 26, 2014

SINGAPORE — MCL Land has submitted the top bids for two Executive Condominium site tenders that closed yesterday in closely-fought contests that showed developers were still keen to replenish their land banks on expectations that the hybrid housing type will remain popular.

Both the sites in Choa Chu Kang Grove, with almost identical areas of about 177,120 sq ft, were released under the Confirmed List of the Government Land Sales Programme. Labelled Parcel A and Parcel B, they have plot ratios of 3.5 to yield an estimated 1,239,840 sq ft of total gross floor area (GFA). This can be developed into about 1,150 EC units, said the Housing and Development Board (HDB).

MCL put in a bid of S$232.5 million for Parcel A, which translates into S$375.05 per sq ft per plot ratio (psfppr) and S$210.1 million for Parcel B, which translates into S$338.94 psfppr. The top bids were only 0.5 per cent and 1.7 per cent higher, respectively, than the second best bids for the two tenders. The rectangular-shaped Parcel A attracted seven bids, while the odd-shaped Parcel B got four bids.

It was a winning brace for MCL, which narrowly lost out in an EC tender in Anchorvale only two weeks ago that was priced at S$367 psfppr.

The HDB will award the Choa Chu Kang tenders at a later date.

Mr Desmond Sim, Head of Research at property consultancy CBRE, said: “Seasoned players once again used the opportunity to replenish their land banks. The top bid for Parcel B was (about) 10 per cent lower than the bid for Parcel A, reflecting Parcel A’s premium over Parcel B. Parcel B is next to a petrol station. Parcel A, which has more frontages and is more regular-shaped, garnered three more bids.”

Mr Eugene Lim, Key Executive Officer of property firm ERA, said: “Developers are still confident that there is a demand for ECs as ECs will remain a very popular option for HDB upgraders.

“It can be seen that the bigger developers are keen on getting huge or adjoining sites,” he added. “It could also be that developers are mindful of the risk that the adjoining site may be sold for less, so they would want to protect their land value.”

Mr Lim said MCL might consider combining the two sites for economies of scale or launch them separately for more exclusivity. He estimated the launch price to be S$800 to S$850 psf.