Residential site at Yishun Avenue 9 attracts five bids

SINGAPORE – A residential site at Yishun Avenue 9 received only five bids at the close of the tender yesterday, indicating tempering demand in a traditionally popular district, though some analysts noted the relatively high offer by EL Development.

Notably, the margin between the first and fourth bids was less than 10 per cent, showing that developers may be mindful of the softening of the market, some analysts said.

“The bids show some level of restraint on the part of developers. This restraint is reflected in the relatively narrow margins between the first and the fourth bids that fall within a 10 per cent band,” said Mr Desmond Sim, Head of CBRE Research in Singapore.

“With the new announcement on HDB resale procedures moving away from the focus on high cash-over-valuation (COV), demand from HDB upgraders could dampen. Traditionally, COV has been the propellant for HDB upgrader demand for mass-market condominium projects,” he added.

The top bid for the 99-year leasehold site was tabled by EL Development at S$278.8 million, which works out to S$450 per sq ft per plot ratio (psf ppr).

Ms Christine Li, Head of Research and Consultancy at OrangeTee, noted that the psf ppr is a historical high for a residential non-landed Government Land Sales site in Yishun (not including mixed development). The last pure residential land tender in Yishun, which is now the Skies Miltonia, attracted a top bid of S$363.60 psf ppr in November 2011. The current record price for a land parcel is the site of The Miltonia Residences, which garnered a top bid of S$405.53 psf ppr in August 2010, she noted.

The 221,239 sq ft site, which is located along a canal and the Yishun forested area, is near a future road that will lead to Seletar Aerospace Park. While buyers can expect an unblocked view of the sea, some may be put off because it is adjacent to an industrial zone, Ms Li added.

“Sites in Yishun seem to be popular among developers, with the previous five land tenders gathering at least seven bids. Given that the subject site is neither a mixed development site nor near an MRT station, we saw the lowest number of parties contesting in Yishun since June 2010,” Ms Li said.

She expects the average selling price for units at the project, which has a maximum permissible gross floor area of 619,474 sq ft, to start from S$1,000 psf.