Tengah EC parcel is less popular than expected. The highest bidder was Hoi Hup Sunway at S$701 psf ppr
Land prices in EC projects rose steadily in the last 2 years. EC launches prices also rose. Prices have increased since 2022 when 70 per cent of EC projects were launched at a price of S$1,300 psf. CDL’s Lumina Grand – the latest EC – sold 53% units in January 20,24 for an average of S$1,464 psf.
In June of 2021, a joint partnership between CDL Land & MCL Land sold the first EC plot in Tengah for S$400.3 Million or S$603 psf. Copen EC, launched in Oct 2022, had a S$1,300 psf price tag and was sold out by the end of that month.
It is possible that developers are hesitant to bid on this EC plot because of the EC units coming up at the adjacent parcel, which could produce 495 more units.
Hoi Huup-Sunway’s winning bid for Plantation Close, a nearby site, was a fraction under the amount they paid at a previous tender in June of last year. The site that saw nine bidders pour in was sold for S$703 PSF PPr or S$348.5 Million.
CBRE cites two adjacent projects Altura & Lumina Grand on Bukitbatok West Ave. as competitors.
This segment is less affected by recent cooling measures because it has a higher percentage of owner-occupiers, and more first-time homebuyers.
The firm bids revealed that developers were continuing to “play it safe” by betting on the upgraders’ markets”, and they are confident in the saleability of the project.
In addition, there is a limited amount of new ECs on the market. This has led to developers looking for a more risk-free development site to include in their inventory.
There are fewer 500 EC un-sold units on the current market.
Hoi Hup Realty is announcing its presence in Tengah. Sunway Developments has also made the Tengah region a key location in their strategy.
The bid by Hoi Hup Sunway is a prudent defensive strategy for maintaining their presence and dilution competition in nearby.
This will also allow them to set future prices in a manner that is affordable but profitable.
If the developer were to win the second Plantation Close EC site, they would be able synchronise strategically the timing and prices of the launches of these ECs.
Hoi Hup Realty & Sunway Developments bid the most at S$423.4 million, or S$701 a square foot per plot rate (psf ppr).
The average cost of new EC launches grew by 5.8 per cent, from S$1,329 psf a few years ago to S$1,406 psf a couple of years later. Plantation Close’s units are expected to range from S$1,400 per sq ft to S$1,500.
Housing and Development Board closed its tender on Thursday, February 1, with four bids. jden showflat
Hoi Hup – Sunway joint venture was bidder with a S$416.9million offer that was S$690psfppr by Qingjian Realty. Hong Leong Holdings (HHL) and Mitsui Fudosan (MFS) followed with an S$398,6 million bid, or S$660 psf per year. City Developments Ltd.’s subsidiary also made a S$383.8m offer at S$636psf per year.
The developer would be able take advantage of economies of size by merging all the sites together to create a single megaproject with more than 1,000 homes.
Sim Lian received an EC Tampines Site in October, 2023. It cost S$543million or S$721 psf ppr. That’s 2.8 percent more than Thursday’s top bid.
Also, a future EC at Jalan Lonyang Besar will be put up for tender in Pasir Ris in May 2024. Pasir RIs had its last EC plot sold in 2012; this could indicate that the pent-up interest in ECs is greater due to a long gap between EC launches.
Plantation Close is launching its latest project during the fourth quarterly of 2025. It will coincide with the anticipated global economy recovery in 2020.