Prince Charles Crescent site up for tender
A 99-year leasehold residential site at Prince Charles Crescent (Parcel B) has been put up for sale in a public tender by the government, with analysts saying that this will stoke healthy interest from many developers given its prime location.
The parcel, which is expected to yield some 655 residential units, is part of the confirmed list of the Government Land Sales (GLS) programme for the first half of this year.
The land parcel has a site area of 24,964 square metres with a permissible gross floor area of 52,426 sqm, the Urban Redevelopment Authority said yesterday.
It is located within an established residential estate and a 10-minute drive to Orchard Road and the city centre. Schools located within the vicinity include Crescent Girls’ School and Gan Eng Seng School.
Since the tender is for the only site in the confirmed list that is located in the city fringe, it is expected to garner a healthy number of bids on its April 16 tender submission date. But developers are not likely to be aggressive in their bid prices, given concerns over recent softness in the residential market.
Desmond Sim, head of Singapore research at CBRE, said that he expects the land parcel to attract as many as 10 bids from major developers, including foreign players. Smaller developers may pool together via joint ventures to spread the risks and costs.
“Seasoned developers know that the market is feeling the pressure of unsold units and price correction, so they will factor all that in their price bidding,” Mr Sim said. “They will definitely take reference from the adjacent site, Parcel A, which was sold at $960 per square foot per plot ratio (psf ppr) in 2010.”
Mr Sim is pegging his estimate for the land bids for Prince Charles Crescent (Parcel B) at $900-1,000 per square foot (psf). He believes that developers may also take reference from Alex Residences at Alexandra Road that was sold to Singapore Land for $970 psf ppr in 2012.
Nicholas Mak, executive director for Research and Consultancy at SLP International Property Consultants, said that he expects the tender to attract “a fair amount of interest from developers” with six to 10 bids and the top bid to be in the range of $928-980 psf ppr.
“Due to the size of this project and the financial resources required for the development, this tender is likely to appeal to major developers, such as those who have developed projects in this location,” he said. “These developers include City Developments, Hong Leong Holdings, Singapore Land, Wing Tai and Far East Organization. Some of these developers would also participate in this tender to protect their market share in this location.”
The site enjoys proximity to the Central Business District while being nestled in a quiet neighbourhood, which Mr Mak believes will translate into healthy interest from investors as well as owner-occupiers, depending on the unit mix.
Sounding a more cautious note, Ong Kah Seng, director of R’ST Research, said that he believes interest from developers will be “moderate” and expects five bids with a top bid of $800-900 psf ppr – below the $960 psf ppr level achieved for Parcel A of Prince Charles Crescent.
Given the loans cap imposed by the total debt servicing ratio (TDSR) framework, developers will have to price their projects sensitively to attract buyers, he said. “Most buyers of city-fringe private homes already own a residential property, so they will be subjected to additional buyer’s stamp duties and their TDSR limits can be exceeded if they obtain a large loan to finance their new property.”
Units at Alex residences were sold at lower prices than its next-door project Echelon during their launch last November. Similarly, Parcel B of Prince Charles Crescent would have to compete for tenants with Wing Tai’s The Crest condo project (Parcel A) just next door when both projects are completed, Mr Ong said. This will compel selling prices for the project on Parcel B and the top land bid to be “quite realistic”.