Tender closing of Jalan Loyang Besar and Margaret Drive GLS sites

Tender Closing for GLS Sites

Of the two Government Land Sales (GLS) tenders that closed today, more developers showed interest in the Executive Condominium (EC) site at Jalan Loyang Besar with four bids, against the two for the private non-landed residential site at Margaret Drive. Notwithstanding the better and more popular central location, access to established amenities and walking distance to an MRT station, and a lower ticket size of the Margaret Drive site (the top bid at Margaret Drive is S$497 million against a top bid of S$557 million at Jalan Loyang Besar), developers gravitated to the more affordable homebuyer option of an EC plot.

Developers appear to be more willing to bet on an entry level private-public hybrid housing type in Pasir Ris, mainly targeting first time buyers and HDB upgraders than a choice private condominium plot in a popular fringe location that may have a sizeable HDB catchment of sellers whose units have recently passed the five-year minimum occupation period (MOP).

These potential HDB upgraders in the Queenstown Planning Area can possibly sell their units with a substantial premium that will allow them to transit into the private home market. This is a clear reflection of how risks have increased for developers in the private condominium space, amid cagey take up at new launches in 2024 to date.

Jalan Loyang Besar  

The top bid of $729 psf ppr at Jalan Loyang Besar is slightly above expectations, given that the parcel is not within walking distance to Pasir Ris MRT Station. On a psf per plot ratio basis, this unit land rate will also be the highest ever recorded for ECs surpassing the S$721 psf ppr successful bid at Tampines Street 62 (Parcel B) that was awarded in October 2023.

Nonetheless, the immediate neighbourhood is surrounded lush greenery in the form of sea-front and river-front (Sungei Tampines) parks, as well as schools and recreational facilities that include the retail and lifestyle hub of Downtown East. Additionally, there has been no other EC development in Pasir Ris since Sea Horizon (which is adjacent to the subject site) was completed in 2016, so there is likely pent-up demand for EC housing in the area.

At a land price of S$729 psf ppr, the breakeven cost could possibly range between S$1,300 psf and S$1,400 psf depending on technical, material and design considerations, with launch prices starting from S$1,500 psf. With a possible average price of about S$1,600 psf when launched, this might appeal to first time buyers and HDB upgraders in the east of Singapore as household net worth and incomes remain intact. After all, some recent resale transactions of ECs at Sengkang have reached beyond S$1,600 psf.

Margaret Drive

The land rate of the top bid at Margaret Drive of S$1,154 psf ppr could translate into a possible launch price of just above S$2,400 psf with an overall average price of between S$2,500 psf to S$2,600 psf. Some of the smaller units at Stirling Residences that recently completed in 2022, have been observed to have transacted between S$2,500 psf to S$2,700 psf.

A well-designed private condominium in the popular fringe location of Queenstown is likely to lure homebuyers from a sizeable HDB catchment of sellers whose units have recently passed the MOP in the area. Just last week, it was reported that a premium five-room flat at Margaret Drive near Dawson estate was sold at new record high of S$1,725,888.