Market watchers are keeping an eye on the Bideford Road site that Thong Sia building used to occupy. Source: JLL
Oversupply and remnant stock plague Singapore’s private non-landed residential market, and all eyes are on how developers will make their moves in 2017. We take a look at the upcoming projects pipeline.
By Chang Hui Chew
Almost 15,000 non-landed private residential units would have exchanged hands by the time 2016 closes, of which more than half were primary developer sales.
Ever since 2013, with the implementation of Additional Buyer’s Stamp Duty (ABSD) and Total Debt Servicing Ratio (TDSR), the private condo market has been in the doldrums. As we covered in a previous Guru View, volumes have begun to recover, even though prices continue to slide.
As 2017 approaches, we bring to you our Guru View of what is likely to happen in the new launch market.
Upcoming hot launches in 2017
By our count, there are likely close to twenty new condominiums, executive condominium (EC) and mixed development projects that will launch in 2017, if developers were to develop all the current land that they bought under the Government Land Sales (GLS) programme or en bloc sales in the past couple of years (refer to Figure 1 for a selection of potential new launches).
At time of writing, there are also two plots of land that are up for bids, and two more plots that might be launched for sale before we sing Auld Lang Syne to usher in 2017.
Bideford Road
In July 2015, the residents of Thong Sia building approved a collective sale of the freehold District Nine property just off Orchard Road for the sum of $380 million to SIN Capital Group, a private investment company, the only en bloc sale in the whole of 2015.
For convenience and a prestigious address, there are few locations in Singapore or even in the region that can beat an Orchard Road location. The site is located in between Cairnhill Nine and Paragon Shopping and Medical Centre. 313 Somerset, Ngee Ann City, Mandarin Gallery and Wisma Atria are all within five minutes’ walk.
Public transportation links are plentiful in the area, with a plethora of bus lines. Furthermore, Orchard MRT is a planned interchange to connect the North-South Line and the Thomson-East Coast Line (TEL).
At time of sale, Thong Sia building had seven levels of commercial space and 19 levels of residential space. Many small scale spas, salons and beauty parlours operated in the commercial space, while the residences were known for their large sizes. While there were 19 levels of residential spaces, there were only 37 residential units.
While SIN Capital has not indicated when they are likely to launch the project for sale on the site, the residents of Thong Sia building have moved out and the current building has been demolished.
With next door Cairnhill Nine one of the strongest performing prime properties for 2016, and few likely competitors in 2017, it’s possible that SIN Capital will launch the project for sale in 2017.
Those looking to purchase units at this new project should be wary of potentially high prices. SIN Capital bought the unit at about $2430 per sq ft of the gross floor area. After factoring in the cost of redevelopment, marketing and their profit margin, the likely price of the redevelopment might be at the top end of buyers’ appetites.
Alternately, SIN Capital could choose to redevelop the project as serviced residences. If so, they are likely to face stiff competition from the Ascott managed serviced residences right across the street at Cairnhill Nine.
Martin Place
In July of this year, developer GuocoLand successfully tendered for the almost 16,000 square metre site at Martin Place just off River Valley Road, with a bid of $595.1 million. The site is estimated to yield about 450 condo units.
The location is a short distance to some of the hippest bars, cafes and restaurants along Robertson Quay, and is likely to be popular with investors looking to rent out units to expatriates.
At the time of the bid, market watchers commented that it was the highest per square foot per plot ratio (psf ppr) price paid for a purely residential site. Developer GuocoLand, however, is no stranger to investing a premium for choice land sites.
In 2007, GuocoLand collectively purchased Leedon Heights for the sum of $835 million, and subsequently redeveloped it into the SCDA-designed Leedon Residence.
Subsequently, in 2010, the developer also paid the sum of $1.7 billion for the land on which Tanjong Pagar Centre, designed by Skidmore, Owings and Merrill, currently now rises.
Given GuocoLand’s history of developing great architecture in prime locations, the River Valley site is in good company.
Furthermore, with a relative lack of supply in prime properties and renewed interest by foreigners in Singapore’s real estate market as a capital safe haven, the project that will be launched at this site is likely to be well-received at launch.
Siglap Road
At the start of 2016, a consortium led by Frasers Centrepoint paid $624 million for a sea-fronting piece of land next to Victoria School.
Abutting East Coast Parkway, the project that will be built on the site is likely to have an unblocked view of the sea, and will be the last project in the area to have such a frontage, unless nearby Laguna Park or Neptune Court were to finally successfully en bloc.
During the bid process, the Urban Development Authority (URA) estimated that about 750 units could be built on the land parcel.
However, Frasers has indicated on their website that the project will have 840 units and will stand at 27 storeys high.
While Frasers has yet to officially announce the name, PropertyGuru understands that it is likely to be named Siglap Residences.
A key selling point for the project, aside from the sea views, is its short walk to the upcoming Siglap MRT station on the upcoming TEL. The proposed MRT station is likely to be a couple of minutes’ walk away from the project, with a likely entrance to the MRT station along Siglap Link, according to materials made available by the Land Transport Authority (LTA).
When complete, the TEL will link the area to Orchard Road, Chinatown, and up north to Woodlands. There are also plans for the TEL to link to the proposed Johor Bahru-Singapore Rapid Transit System, and commuters could one day ride all the way from Singapore’s eastern beaches up to Johor.
Home buyers who purchase at the site however, should not expect these benefits immediately upon the project’s completion of construction. The seven-station East Coast stretch of the TEL is only scheduled to be completed in 2023, but the developer is expected to “future-price” the project when it launches for sale.
Land sales in 2017
On 16 December, the government announced the land sites for sale in the first half of 2017 (refer to Figure 2). There are five residential sites that it will be releasing on the Confirmed List, which could yield an estimated 2,330 residential units.
There will only be one EC site available next year as well, located at Sumang Walk, which the government has placed on the Reserve List.
This is a prudent move by the state, given that ECs are currently taking a while to move. A tightening up of EC supply will help to clear the current stock in the market.
A Reserve List site will not be triggered for sale unless a developer indicates to the URA that they are willing to pay the reserve price set for it, while a Confirmed List site will be put up for sale by the state during the stipulated period.
Out of the five sites on the confirmed list, the plot that is likeliest to see the most active bidding is the Woodleigh Lane plot, in the upcoming Bidadari estate and next to Woodleigh MRT station.
The Reserve List however, has several sites that could pique the interest of developers if they feel the timing is right. These include the Holland Road site next to Holland Village, as well as the site at Jiak Kim Road, which includes the land on which popular nightclub Zouk used to occupy.
Both sites are mixed-use commercial and residential plots, and could potentially become great projects with great character.
Of course, there is always the chance for developers to build up their land bank with en bloc sales as well. These sites include Lakeside Towers in Jurong, Eunosville in Eunos and Rio Casa in Hougang, amongst others.
As 2016 moves on over to 2017, we’ll do our best to keep you posted on the property market with our Guru View. Happy holidays!
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