Strong demand seen for Queenstown condo site

TWO sites that could yield 1,300 homes were released by the Government yesterday.

One is a choice site next to Queenstown MRT station in Commonwealth Avenue that is tipped to fetch more than $500 million.

The other is a plot near Tanah Merah MRT station that was made available on the reserve list.

The 12,100 sq m Queenstown plot can accommodate 700 homes and is expected to attract keen interest from developers due to its central location.

Queenstown homes are in demand. Earlier this year, a Housing Board (HDB) resale flat there became the first unit to breach the $1 million mark, while new private launches in and around the area can go for about $1,500 per sq ft (psf).

Experts say the 99-year leasehold site is likely to be “heavily contested”.

Mr Lee Sze Teck, senior manager of training, research and consultancy at Dennis Wee Group, expects up to 10 bidders with a top offer of between $850 and $900 psf per plot ratio (ppr).

That prices the site at between $543 million and $574 million.

Demand could come from home-seekers who find private flats in the Alexandra area beyond their budget, he added.

Recent tenders for nearby sites in Alexandra Road and Prince Charles Crescent reflect optimism in the market, indicating that developers will keep chasing well-located sites in the central region, noted ERA Realty key executive officer Eugene Lim.

He expects between five and eight bidders, with a top bid of up to $980 psf ppr – or $625 million.

Resale prices at Queens, a 99-year leasehold condo built about 10 years ago across the road from the site, are $1,300 psf on average, he noted.

Four residential sites from the government land sales (GLS) programme have already been sold in the Queenstown and Redhill estates since late last year, noted property consultancy Knight Frank.

Its research head, Mr Png Poh Soon, said this impending supply is likely to result in land bids being moderated.

The other sale site announced yesterday is a 25,800 sq m plot in New Upper Changi Road that can yield about 600 homes.

It was made available for sale on the reserve list by the HDB.

If the 99-year leasehold site is sold, it will bring to four the number of development plots recently acquired in the New Upper Changi Road and Bedok South Avenue 3 area.

These plots can collectively yield about 2,150 homes, Knight Frank said.

ERA’s Mr Lim added that even with the range of plots on the recently announced GLS programme for the first half of next year, the new site will still be triggered as developers want well-located mass-market land.

But developers might temper their bids as they look at better land under the newly announced GLS instead, Knight Frank’s Mr Png said.

Confirmed list sites go on sale regardless of interest, while reserve list plots are put up for tender only if a developer makes an acceptable initial offer.

Anytime now, the URA is expected to release the final two commercial sites in the H2 2012 GLS programme – a 1.2-ha confirmed list site near Jurong East MRT Station and a site along Cecil and Telok Ayer streets.

The latter will be made available on the reserve list.

Both sites are expected to have minimum office component stipulations.