The Real Deals – Looking To 2013


Project launches next year. Excluding en-bloc’ed and Executive Condominium sites, around 21 already-sold sites are expected to be launched next year. We examine the remainder of the Government Land Sales (GLS) sites that have been sold and compare them to launches and secondary market transactions nearby. We will be focusing on the Farrer and Tanah Merah areas; Farrer sites were one of the highest-priced GLS sites, while Tanah Merah is seeing an explosive incoming supply.

Interest in Farrer could be revived.Evidently, sites on Farrer have had slower take-up rates relative to mass-market projects. Under changes announced by SLA recently, the project completion period for residential en-bloc sites will now start from date of the collective sale order, instead of the date of the issue of a Qualifying Certificate. This may prompt developers to en-bloc larger sites, such as the en-bloc attempt for Tulip Gardens in 2007. Among the new sites, two sites that were hot favourites for small developers and funds and achieved the highest GLS prices, indicating there is still an innate price premium for the Farrer area.

Explosive supply in Tanah Merah vicinity. Previously, supply in Tanah Merah was limited and coming solely from the secondary market. But it was clear that interest in future sites in the area was bound to spike when Optima@ Tanah Merah received an overwhelming take-up rate of over 98% within two months in mid-2009. YTD, GLS has released 1,863 units in the Tanah Merah vicinity. The recent top bid for New Upper Changi Road (Parcel A) was from Keppel Land at a land cost of SGD434.6m or SGD791.4psf, a 17.1% premium to the price at which Urban Vista’s land was sold in August. Keppel’s site was also sold at 48% above the price that Far East, Fraser Centrepoint and Seikui House jointly paid for their Eco site. A reserve site just beside the Eco project will be launched in February 2013 and comprise approximately 600 units. In addition, a commercial site has been slated between Urban Vista and Optima @ Tanah Merah, which will be a hot seller as it is directly next to the Tanah Merah MRT station. However, the commercial site’s date of availability is still indefinite.

Alison FOK
(65) 6432 1447