Tengah EC parcel gets fewer bids that expected. Hoi Hup Sunway is top with S$701 psf ppr

Land prices have been rising steadily for EC-projects over the last two decades, while EC launch costs are also increasing. Sales of projects launched in 2022 at prices between S$1,300 and S$1,300 per sq ft were around 70% sold. But sales have appeared to slow with higher prices. CDL’s Lumina Grand EC, which was launched in January of 2024, saw 53 percent of units sold at S$1,464 psf.

In June 2021 the first EC was sold in Tengah to a joint venture of CDL and MCL Land. It cost S$400.3M or S$603 psf. Copen Grand EC which was launched in 2022 at a price of S$1,300 psf, sold out immediately after its launch.

Hoi Hup-Sunway Joint Venture’s bid came in at S$416.9 Million, 1.6 percent higher than Qingjian Realty or Forsea Residence who offered S$690 PSF PPr. Hong Leong Holdings followed closely behind with a S$398.6-million bid or S$660 per sq ft ppr. Mitsui Fudosan, a subsidiary of City Developments Ltd, then made an S$383.8-million offer at S$636 for each sq ft ppr.

One of the main reasons for the decrease in bids could be the developers’ awareness that the adjacent plot will soon have 495 units.

The highest bid of Thursday was just a hair below what Hoi-Hup-Sunway had paid for the Plantation Close site next door at an auction in June last. Nine bidders competed for the site in question, and it was sold to Hoi Hup-Sunway at S$703/sf/ppr (S$348.5million).

CBRE cited Altura & Lumina Grand as two of the nearby projects that compete with Bukit Batok.

The recent property cooling measures have not had a significant impact on this segment due to the greater proportion of owners and first time buyers.

The bids were indicative of developers continuing to place bets “on the upgraders’ market” and that despite a relatively large project with 560 apartments, developers had confidence in its ability to sell.

A limited number of new ECs are available on the market and many developers are looking to expand their inventory with a site which is less risky.

Currently, there are fewer than 500 EC units unsold on the market.

Hoi Hup Realty (Hoi Hup) and Sunway Developments (Sunway) are consolidating their presence in Tengah. Both companies have marked this area as the focal point of the development strategy. It is clear that they believe in the potential of the area.

The bid submitted by the Hoi Hup/Sunway joint enterprise is a prudent, defensive strategy designed to maintain its presence and stifle competition.

It also allows them to price the units at a profit-making but affordable level.

19 nassim showflat

By winning the second Plantation Close EC parcel, the developer will be able strategically synchronise both the timing of launch and the pricing.

The developer may be able to benefit from economies scale by merging the sites and creating a mega project consisting of more than 1,000 apartments.

Sim Lian, a Singaporean company, was awarded a site at Tampines for S$543,000,000 in October of 2023. This is S$721 psf ppr – 2.8 percent more than the top offer for the Tengah location on Thursday.

The next EC development in Pasir Ris will also be offered for sale in May of 2024 at Jalan Loryang Besar. Pasir RIs last EC land sale was in 2012. Due to the time gap, there may be more pent up demand.

Plantation Close, the latest Plantation Close Project, will be launched during the fourth quarter 2025. This coincides with the anticipated global recovery in 2025.

The average price per square foot for new EC launches grew 5.8 percent from S$1,329 psf psf launched in 2022, to S$1,406 psf psf launched in 2023. Plantation Close is expected to sell in the S$1,400-S$1,500 price range.

Hoi Hup Realty & Sunway Developments, a developer of executive condominiums (ECs) in Tengah’s Plantation Close received fewer bids than expected. The highest bid came from Hoi Hup Realty & Sunway Developments at S$423.4Million or S$701 psf ppr.

Housing and Development Board, which has been in the market since January 1, received four bids.


error: Content is protected !!
Call Now ButtonCall for Showflat Appt.