Only two bids for Sembawang EC site, but top price bullish

SINGAPORE — The build-up in executive condominium (EC) supply in the north of Singapore has taken its toll on developers’ interest in the hybrid public-private home segment, with the latest tender for a plot in Sembawang attracting just two bids.

However, property analysts noted that the highest bid of S$229.4 million was bullish, signalling confidence by top bidder Qingjian Realty in the tender that closed yesterday.

The site, located at the junction of Sembawang Road and Canberra Link, sits on about 309,418 sqf of land with a plot ratio of 2.1 and Qingjian’s bid works out to around S$353 per square foot per plot ratio, the Housing and Development Board (HDB) said. It was well above the S$300-to-S$330 range that the analysts had expected.

The other bid was placed by City Developments unit Verwood Holdings and TID Residential, who put in S$208.5 million, or around S$321 psfppr, the HDB said.

Mr Nicholas Mak, executive director of SLP International Property Consultants, said: “I believe the main reason for the low participation rate from developers in this land tender is the steady supply of new EC project launches from 2015 onwards.

“Excluding Bellewoods EC, which had launched its e-application exercise last weekend and the subject site, there are four other unlaunched EC projects with a total of 2,230 units in the north region presently,” he noted.

Qingjian, a seasoned EC developer, will build around 600 units of the hybrid homes on the 99-year leasehold site that has a maximum gross floor area of 649,778 sqf. It will be Qingjian’s sixth EC project.

“The EC land at Sembawang Road/Canberra Link is about 400m from the proposed new Canberra MRT station and we are planning to develop about 600 units in that location … We remain confident of the continual demand in the EC market,” Qingjian’s general manager Li Jun said yesterday.

The developer had just launched Bellewoods EC over the weekend. At the end of Sunday, it received around 400 e-applications for the Woodlands project, which is the first new EC launch after a hiatus of almost a year.

The break was the result from a rule introduced last year that requires developers to launch EC units for sale only 15 months after securing the land or upon completion of foundation work.

Analysts said while demand for ECs is still healthy, the upcoming supply will allow buyers to be selective. This follows changes to the EC scheme late last year that included the introduction of a mortgage servicing ratio and resale levies for second-time applicants, which are expected to hit demand.

“Demand is still there, but buyers are more selective, so the pace of sales is also slower now. But this doesn’t mean ECs have lost the appeal. I think developers would still want to venture into this segment because the market for upgraders is there,” said Mr Eugene Lim, key executive officer of property agency ERA.

Mr Lim said that with its top bid, Qingjian is well positioned to price the units below S$1 million.