TWO freehold development land parcels at Thiam Siew Avenue, a residential street of landed homes adjacent to Tanjong Katong Road, have been sold for S$815 million to a joint venture between Hoi Hup Realty and Sunway Developments.
The deal marks the largest residential development site sold since the July 2018 round of property cooling measures, when the government raised Additional Buyer's Stamp Duty (ABSD) rates and tightened Loan-to-Value limits.
According to Savills, the land price of the 2.45 ha site, which has a plot ratio of 2.8, translates to about S$1,488 per square foot per plot ratio (psf ppr), after an estimated development charge of about S$284 million. The land rate works out to about S$1,440 psf ppr if a 7 per cent bonus on balconies is further taken into account, it added.
Head of research and consultancy at ERA, Nicholas Mak, noted that the deal represents the highest price paid for in a single transaction for residential development land since the sale of a Government Land Sale (GLS) site at Silat Avenue for S$1.035 billion, or S$1,138 psf ppr, in May 2018.
Announcing the sale in a news release on Friday (Nov 19), broker Savills Singapore said the transaction was sealed following the close of its public tender exercise on Thursday.
Wong Swee Chun, chairman and managing director of Hoi Hup Realty Private Limited, said in the release that the firm took interest in the sites as they are 2 rare freehold sites in the east of Singapore.
"In today's competitive real estate market, we are very confident of the demand for quality freehold developments, especially for these big freehold plots in District 15," he said.
Wong also revealed plans to develop 2 luxury high rise condominiums with more than 800 units there.
Based on the land rate of S$1,440 psf ppr, Mak estimates the future condominium on this site could be launched at between S$2,400 and S$2,630 psf, after factoring in construction and other development costs.
Construction costs have spiked since the pandemic broke out in 2020 on the back of a manpower crunch and higher building material costs, which is putting pressure on profit margins.
Other freehold private residential projects currently being marketed in district 15 include Amber Park, Coastline Residences and Nyon. According to Mak, the median price for units sold at Amber Park, Coastline Residences and Nyon between January 2021 and mid-November worked out to S$2,448 psf, S$2,436 psf and S$2,317 psf respectively.
Savills, meanwhile, noted that the development sites - comprising a total of 22 plots that are currently occupied by 5 bungalows and 10 pairs of semi-detached houses - are poised to benefit from their close proximity to the Paya Lebar Central precinct.
The Paya Lebar Central precinct was selected as 1 of the 9 precincts joining the Urban Redevelopment Authority's pilot Business Improvement District (BID) programme to drive efforts in enlivening the city.
Further commenting on the significance of the sale, Mak said the highest price paid for development land this year so far goes to the GLS tender for the Marina View white site located near the Singapore Conference Hall. It was sold for S$1.508 billion on Sep 29, or S$1,379 psf ppr.
Mak also said that the current en bloc market has not really heated up yet as developers are selective.
"Furthermore, some developers are selective of their land acquisitions because if the market becomes too heated, there is the risk that the government will intervene with more market curbs," he added.