Strong interest likely for Toa Payoh housing site

SINGAPORE –  Two more residential sites have been released for sale, with consultants expecting a high level of interest for the land parcel in Toa Payoh where new supply of private residential projects is limited.

But they believe that interest for the site at Dundee Road, next to Queenstown MRT Station, could be tempered by unsold stock in the vicinity.

These 99-year-leasehold sites were launched by the Housing & Development Board under the Confirmed List of the first-half 2015 Government Land Sales programme on Wednesday.

Collectively, they can yield about 1,180 residential units.

JLL national research director Ong Teck Hui noted that the market is “starved of GLS residential sites”. In the first four months of this year, there were tenders for only three sites – Jurong West St 41, Sturdee Road and Tampines Ave 10.

“This could result in more bids per site as developers try to secure sites to develop, even in today’s challenging market conditions,” he said. “However, bids are likely to be measured as many developers who had bid optimistically for sites in the past have encountered pricing difficulties in the current soft market and unable to sell their units.”

Consultants differ widely in their projections – from as few as five bids to as many as 25 bids for the Toa Payoh site at Lorong 6 Toa Payoh/Lorong 4, which faces a Chinese temple.

SLP International executive director Nicholas Mak was most bullish, expecting the Toa Payoh site to draw 15 to 25 bids with the top bid likely to fall within S$311 million to S$332 million or S$680-S$725 per square foot per plot ratio (psf ppr).

Citing strong locational attributes, Mr Mak noted that this site is located at the city fringe, is a 20-minute drive to the CBD, and within walking distance to Braddell MRT Station.

“There are very few potential sites for private residential development in the Toa Payoh housing estate,” he added. “Hence, the new condominium on this site will face very little competition when it is launched for sale.”

The last land tender in Toa Payoh dated as far back as 2008 and was sold to NTUC Choice Homes for S$290.2 million or S$460 psf ppr.

The developer’s 99-year-leasehold project, Trevista, was completed in 2011 and the 590 units were sold at an average price of S$1,352 psf.

DTZ head of research Lee Nai Jia said he would expect apartments at the Toa Payoh site to appeal to young homeowners given its proximity to schools.

He reckoned that units at the Dundee site could draw both investors and owner-occupiers, given that it is between the one-north development and the CBD, as well as being near to schools such as Gan Eng Seng Primary School.

But consultants pointed out that despite the site’s central location, one major bugbear is the unsold inventory in the area including those in next-door project Commonwealth Towers.

“Although this site is quite attractive, some developers may not participate in this tender because it is expected that the developers of Commonwealth Towers (City Developments and the Hong Leong Holdings) would bid aggressively enough to protect their market position in this location.

Only about 44 per cent of the 845 units in Commonwealth Towers are sold as at end-March,” Mr Mak said.

R’ST Research director Ong Kah Seng noted that the Alexandra locality at Redhill also has new homes being built in projects such as Echelon, Alex Residences, and The Crest that could pose competition for tenants.

Consultants are expecting three to 10 bids for the Dundee Road site, and the top bid to come in at S$700-S$851 psf ppr, below the S$883 psf ppr paid in February 2013 for the land parcel of Commonwealth Towers.