West Coast housing site sees cautious bidding

SINGAPORE — A land parcel for private residential development at West Coast Vale received only six bids at the close of the tender, a lukewarm response that property analysts say reflects a more selective approach by developers as they conserve financial resources for other more attractive sites.

The top bid of S$314.1 million, or about S$551 per square foot per plot ratio (psfppr), was tabled by EL Development, the Urban Redevelopment Authority (URA) said today (Aug 4). It is 3.2 per cent higher than the second-highest bid tabled by a consortium comprising Hoi Hup Realty, Sunway Developments and Oriental Worldwide Investments.

The number of offers received for West Coast Vale — which is the last residential site in the Confirmed List of the Government Land Sales (GLS) Programme for the first half of this year — is the lowest since the close of the GLS tender for another condominium site at Fernvale Road (Parcel A and Parcel B) in August 2014, noted Mr Nicholas Mak, Executive Director of Research & Consultancy at SLP International Property Consultants.

The top bid of S$551 psfppr is also the lowest since the land tender for a condominium site at Tampines Ave 10 (Parcel D), which closed in April this year. That site fetched a price of S$483 psfppr.

“One possible reason for the relatively low number of bids is that among the six residential sites on the Confirmed List of the Government Land Sales (GLS) Programme for 1H 2015, the land parcel at West Coast Vale is one of the less attractively located sites. Furthermore, some developers may be conserving their financial resources for the coming tenders some of the more attractive sites in the GLS Programme for 2H 2015,” said Mr Mak.

The 99-year leasehold site has a site area of 203,531 sq ft and a plot ratio of 2.8. With a maximum gross floor area of 569,895 sq ft, it can yield about 595 residential units.

The site is not within walking distance to any MRT station, but is near several commercial amenities such as Westgate, Jem and Big Box at the Jurong Lake District.

Mr Mak expects units at the site at West Coast Vale to be launched at between S$1,200 and S$1,300 psf.

Compared with the other winning bids of comparable GLS land tenders in the Clementi Planning Area in the past four years, the top bid by EL Development for the site at West Coast Vale is roughly similar to the price that IOI Properties paid to acquire the site at Jalan Lempeng in January 2012. However, it is about 25 per cent lower than the land price at Faber Walk, where Waterfront @ Faber is now located. The hotly contested site at Faber Walk, which had garnered 18 bids, closed just before the Total Debt Servicing Ratio (TDSR) framework came into effect on June 29 in 2013.

“The (West Coast Vale) site fronts the AYE and is also not near any MRT station,” said Mr Eugene Lim, Key Executive Officer at ERA. “Further, in view of the substantial 18,275 units of private residential units with sale licenses but are unsold, developers’ interest for this site may as such be more conservative. Going forward, we expect developers’ interest in land tenders to be increasingly more selective, depending on the location and attributes of the sites put up for tender.”

EL Development is the developer of the troubled Trivelis Design, Build and Sell Scheme (DBSS) flats at Clementi, where more than half of residents at the 888-unit development have complained about multiple defects and the poor quality of their new flats.

To appease residents, EL Development in late May offered a goodwill package to address issues raised.