SINGAPORE (EDGEPROP) -- Two residential sites were put up for sale on the Reserve List of the 2H2021 Government Land Sales (GLS) programme. They are two adjacent sites at Pine Grove, Parcel A and Parcel B, located off Ulu Pandan Road and Pandan Valley.
An unusual condition attached to the development of these land parcels is that a maximum 520 housing units can be built on Parcel A and 565 units for Parcel B, notes Tricia Song, CBRE head of research for Southeast Asia. This is to manage the potential traffic volume from the increase in the population when the new residential developments on these two sites are eventually completed in the future, she says.
“This regulation could also be an effective way to encourage developers to build more family-sized units, such as those with at least three bedrooms each,” notes Song. “Afterall, Pine Grove is an established residential area near the Clementi HDB housing estate. The future condominium development at Pine Grove could cater to the HDB upgraders’ housing demand. Most HDB upgraders with children would need housing units with at least three bedrooms.” (Find HDB flats for rent or sale with our Singapore HDB directory)
At Parcel A, based on the land area of 242,561 sq ft, with maximum gross floor area (GFA) of 509,380 sq ft and 520 units cap, the average unit size of the new development is 980 sq ft. Parcel B has a site area of 269,519 sq ft, and GFA of 565,987 sq ft. With 565 residential units, that means the average size per unit will be 1,002 sq ft.
The sites are considered large, as each can be developed into a new project of more than 500 units, notes Nicholas Mak, head of research and consultancy at ERA Realty. “The sweet spot for developers is sites that yield 200 to 500 units each,” says Mak. “Such sites would be big enough for the developer to enjoy some economies of scale, but still small enough to manage the risk of sudden unexpected changes in market conditions or a new round of government intervention.”
While not particularly near any MRT station, the sites could still draw developers, notes CBRE’s Song. She points to the palatable size of each parcel and relative popularity of the residential enclave, amid depleting unsold inventories among developers. Key attractions of its location include 1km proximity from Henry Park Primary School and Pei Tong Primary School, short drive from lifestyle hub Holland Village and one-north precinct as well as major tertiary institutions such as Ngee Ann Polytechnic, National University of Singapore (NUS) and School of Science and Technology Singapore, she lists. “They provide a rental catchment,” she adds.
Given the land size, the minimum unit size and affordability concerns, the bids are likely to be more tempered compared to recent tenders of the land parcels at Slim Barracks Parcel A and B, where the sites were smaller, with the two sites combined yielding a total of 400 units, compared to close to 1,100 units for these two parcels at Pine Grove.
The winning bids for the sites at Slim Barracks were $1,210 psf ppr and $1,246 psf ppr, notes Song. She expects developers to be looking at selling prices of $1,900–$2,000 psf for the Pine Grove sites, and that means, a land rate in the $1,000–$1,100 psf ppr range.
ERA’s Mak reckons the sites could fetch between $920 psf ppr and $1,000 psf ppr. This would translate to $468 million to $510 million for Parcel A, while Parcel B in the $520 million to $566 million range.
CBRE’s Song points to condominium projects in the vicinity, for instance, the 99-year leasehold Pine Grove, Astor Green, and Cavendish Park, which were completed in late 1980s to 1990s, are trading around $969 to $1,250 psf in 2021 to date. Meanwhile, Quinterra, completed in 2009, has been trading at $1,462 psf this year to date.
Lee Sze Teck, senior director of research at Huttons Asia, believes the chances of the two sites being triggered are “not high”. He says: “There are better sites on the Confirmed List such as Jalan Tembusu and upcoming en bloc sites that will satiate developer’s appetite for land. There may be more sites under the 1H2022 GLS programme which will be announced in December.” (See potential condos with en bloc calculator)
Check out the latest listings near Pine Grove, Astor Green, Cavendish Park, Henry Park Primary School, Pei Tong Primary School, Ngee Ann Polytechnic, National University of Singapore (NUS), School of Science and Technology Singapore