Cautious bidding likely for EC sites

The executive condominium (EC) market may be approaching saturation point, even as the government puts up two more 99-year leasehold ECsites at Sengkang EastWay/Fernvale Link, and Pasir Ris Drive 3/Pasir Ris Rise for sale.

The first site at Sengkang West Way/Fernvale Link (Parcel B) sits on a 151,779.6 sq ft plot, and has a maximum gross floor area (GFA) of about 455,338.8 sq ft. It is expected to yield 420 homes.

The second site at Pasir Ris Drive 3/Pasir Ris Rise has a site area of about 297,729.5 sq ft, and a maximum GFA of 625,231.9 sq ft. It is envisaged to yield about 590 homes.

A possible reason for cautious bidding could be that while HDB has raised the income ceiling and allocation for second-timers, it has also increased the minimum occupation period (MOP) for HDB flats which limits the number of HDB upgraders. First-timers, however, have a plethora of options like BTO and DBSS which might divert demand.

However, Eugene Lim, key executive officer at ERA Realty Network, reckons that the interest developers have shown for EC sites in the first half of the year suggests that they believe the EC market is still robust.

"Interest in EC sites has been keen since the income ceiling for ECs was raised in August last year, replicating developers' confidence of continual demand from a larger group of eligible buyers," he said.

Mr Lim cited the examples of an EC site next to the Tampines Trilliant project, which was awarded to Singxpress Property Development, Creative Investments and Kay Lim Realty for $233.5 million ($373.40 psf ppr), and the site at Woodlands Ave 5, which was awarded to Hao Yuan Investment for $247 million ($317.65 psf ppr) in May this year.

Of the two sites, Mr Lim expects the Pasir Ris site to garner more interest, given its "seaside town appeal".

In addition to the two EC sites, a 99-year leasehold site at Alexandra View (Parcel B), has been made available on the Reserve List system. The 69,981.5 sq ft site has a maximum GFA of 342,916.3 sq ft. It is expected to yield some 375 homes.

All told, the three sites are expected to yield about 1,385 units.

Tender for the EC sites at Sengkang and Pasir Ris will close at 12 noon on Nov 8 and Nov 22, respectively

Source: Business Times – 27 September 2012