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Sembawang EC site launched, developers likely to be cautious

SINGAPORE – The Housing and Development Board (HDB) has released for sale an Executive Condominium (EC) site in Sembawang Avenue, with analysts saying the tender will likely attract conservative bids from developers as sentiment in the property market weakens.

SINGAPORE – The Housing and Development Board (HDB) has released for sale an Executive Condominium (EC) site in Sembawang Avenue, with analysts saying the tender will likely attract conservative bids from developers as sentiment in the property market weakens.

The 99-year leasehold site, released from the Confirmed List of the First Half (1H) 2014 Government Land Sales (GLS) programme, sits on a 238,848sqf area. With a plot ratio of 2.8, it can be developed into a gross floor area of about 668,774sqf or about 620 homes, said the HDB yesterday.

Mr Nicholas Mak, executive director of research and consultancy at SLP International Property, said while the site’s location is not attractive, it would draw interest from developers looking to build their land banks. But he added that they would likely be cautious with their bids.

“The subject land parcel is the second EC site located along Sembawang Crescent, with the first being Skypark Residences ... As with Skypark Residences, the location of the land parcel on offer is not particularly inspiring.”

The housing estate is a quiet, non-mature neighbourhood located far from the Central Business District area, while the site is a 700m walk from Sembawang MRT Station, he noted.

“However, as the locational attributes of all EC sites in the current GLS programme 1H 2014 are more or less similar, we expect the site to still draw interest from developers who need to replenish their land banks. As such, we predict that the site would attract fairly healthy interest from five to eight bidders,” he added.

Two EC sites in Yishun, whose tenders closed last Friday, attracted top bids of about S$330 per square foot per plot ratio (psfppr) and S$335 psfppr. These were at the lower end of analysts’ range of expectations as cooling measures and loan curbs continued to dampen developers’ bids.

Under rules announced last December, EC buyers are now subject to a Mortgage Servicing Ratio of 30 per cent, while second-time applicants who buy such units from developers will have to pay a resale levy.

Mr Mak said that, based on the Yishun results, developers are likely to submit a top bid of between S$300 and S$340 psfppr for the Sembawang site. The tender will close on July 10.

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