The Government has launched the sale of a second residential site this year, while again giving developers more time to assess the property market under the Covid-19 situation before submitting any bids.
The land parcel in Tanah Merah Kechil Link is for a mixed residential development, with the first storey slated for commercial space. It has a site area of 8,880 sq m and a maximum gross floor area (GFA) of 24,864 sq m.
The 99-year leasehold site, which is off New Upper Changi Road, can potentially house about 265 apartments, fewer than the 310 units initially estimated when the site was first announced in December 2019.
It can also yield 2,000 sq m of commercial space that can be developed into strata-titled retail units or offices.
The tender for the parcel will close at noon on Oct 29, after a longer tender period of five months, the Urban Redevelopment Authority (URA) said in a media release on Thursday (May 28). Tenders for government land sales (GLS) sites usually range from six to eight weeks. The tender closing for this site will thus be batched with an executive condominium site in Yishun Avenue 9 launched on April 30.
Property consultants earlier said that extending the tender period to the end of October could help GLS sites obtain higher bids as the Covid-19 pandemic may be contained by then, boosting market sentiment.
Both sites come under the confirmed list for the first half of 2020 GLS programme. There is one remaining confirmed list residential site not yet launched in Jalan Anak Bukit, which can potentially accommodate 865 units.
ERA Realty head of research and consultancy Nicholas Mak said the Tanah Merah Kechil Link site was “choice”, given its location and size.
The land parcel is located next to the Tanah Merah MRT station and within close proximity of Changi Business Park. With no shopping mall around the MRT station, there would be strong demand for shops and food and beverages outlets, he added.
Compared with the other GLS sites for the first half 2020 for both the confirmed and and reserve lists, the Tanah Merah Kechil Link site also has the smallest GFA, which would require less capital requirement and hence, less financial risk to develop, he said.
Given these factors, Mr Mak said the tender for this site can attract five to 10 bids from major developers, with the top bid ranging from $255 million to $238 million, or $840 to $888 per sq ft per plot ratio.
In March last year, a site for mixed residential development was sold at Pasir Ris Central. The site is situated next to Pasir Ris MRT Station. The Pasir Ris Central mixed development site with a site area of 38,004 sqm was sold for $700 million, or $684.50 per sq ft per plot ratio.