[SINGAPORE] JBE Holdings-owned Oriental Pacific Development topped four bids for an executive condominium (EC) site in Sembawang, in a state tender that saw lower-than-expected bids on Thursday (Sep 11).
The top bid of S$197.78 million works out to about S$692 per square foot per plot ratio (psf ppr) for the 99-year leasehold plot that can accommodate a 265-unit project.
Market watchers had anticipated a top bid of between S$700 and S$800 psf ppr for the Sembawang parcel, after an August tender for a Woodlands EC site set a new benchmark with City Developments Ltd’s (CDL) S$782 psf ppr bid.
This is the first time since September 2022 that an EC parcel has garnered a top bid of under S$700 psf ppr, said Leonard Tay, research head at Knight Frank Singapore. At that time, CDL acquired a plot at Bukit Batok for S$626 psf ppr. The project, Lumina Grand, was launched in January 2024 at an average of S$1,464 psf.
Developers may have been more reticent in their bids in the latest tender, since the Sembawang parcel is a fair distance from Canberra MRT station and oddly shaped, he noted.
He added that the developer could take advantage of the lower land cost to launch the site with starting prices under S$1,700 psf; this could capture the attention of price-sensitive homebuyers.
The most recent EC launch, Otto Place, was priced on average at about S$1,700 psf when it was first marketed in July. Hoi Hup Realty and Sunway Developments bought the site for S$423.4 million, or S$701 psf ppr, in February 2024.
Oriental Pacific Development’s bid at Thursday’s tender closing was 4 per cent higher than the second-highest bid of S$665 psf ppr placed by TID, a joint venture between Hong Leong Group and Mitsui Fudosan.
The next highest offer of S$168.17 million, or S$588 psf ppr, came from a consortium comprising ABR Holdings, Roxy-Pacific, Macly Capital and LWH Holdings. A significantly lower bid of S$109 million, or S$381 psf ppr, was placed by Sim Lian.
The difference between the top and bottom bids was a gaping 81 per cent. The result suggests that developers could be less sanguine about the depth of private housing demand in Sembawang, said Wong Siew Ying, head of research and content at PropNex.
The top bid of S$692 psf ppr may have taken into account additional provisions that developers will have to make, as well as potentially higher construction costs while developing the project, due to the site’s elongated shape and sloped terrain, said Eugene Lim, ERA Singapore’s key executive officer.
Another reason for the low bids could have been the site’s plot ratio of 1.4 – the lowest among all the EC sites that have been sold since the housing typology was introduced in 1996, said Mogul.sg chief research officer Nicholas Mak.
The Sembawang site has a land area of 18,968 square metres.
The last EC plot awarded in Sembawang was a site in Canberra Link, awarded to MCC Land for S$233.89 million or S$566 psf ppr in 2019, said Wong. The site was developed into Provence Residence, which launched for sale in 2021 at an average selling price of S$1,142 psf.