Choice Tanah Merah Site For Sale

Source : The Business Times, July 16, 2008

Bids expected at around $250 psf ppr, 20% below price paid for neighbouring plot in 2006

A CHOICE Government Land Sale (GLS) site at Tanah Merah Kechil Avenue is on sale by public tender. But bids are expected to be around $250 per sq ft per plot ratio (psf ppr) - or about 20 per cent less than the $318.50 psf ppr paid for a neighbouring GLS site in 2006.

The new site, which is on the GLS confirmed list, has a land area of 106,298.9 sq ft and a maximum permissible gross floor area of 297,643.4 sq ft.

CBRE Research executive director Li Hiaw Ho said Waterfront Waves, a new condominium at Bedok Reservoir, is being offered at an average of $800 psf, while a sub-sale unit at Casa Merah was sold for $750 psf in March.

In the resale market, units at nearby East Meadows changed hands at an average price of $660 psf in the first half of this year. 'Based on these comparables and taking into account the current market situation, as well as higher construction costs in view of new planning guidelines on bay windows and planter boxes, we expect a new 99-year leasehold project in this location may fetch around $750-$800 psf,' said Mr Li. 'This translates to a possible land price of around $240-260 psf ppr for the site.'

Unlike the GLS site sold in 2006, the new site is right next to Tanah Merah MRT station, which is also the interchange station for Changi Expo and Changi Airport. Mr Li believes the future project on the site will be attractive to upgraders in Bedok New Town and private home owners in the East Coast area. 'It will also be attractive to expatriates looking to rent homes along major transport nodes,' he said.

Knight Frank director (consultancy and research) Nicholas Mak said sales picked up in July, as some residential projects were launched at affordable prices. 'The slight pent-up demand in this segment is due to the lack of major mass-market project launches and the steady rise in HDB resale prices,' he said. But potential buyers in the mass to middle-tier markets are price-sensitive and there is a limit to what they are willing to pay, he noted.

As such, he reckons new units on the latest GLS site could likely fetch an average price of $700-$750 psf and the land price for the site should be $250-$300. The site can potentially be developed into a 10 to 12-storey condominium with about 230 to 270 units, he said.

The Urban Redevelopment Authority said earlier it wants to expedite the development of land around MRT stations to help increase the use of public transport.