Prefabrication construction methods were the root of unexpectedly cheap bids for the site at West Coast Vale at a tender which recently closed.
EL Development had the top bid – $314.1 million or $551.15 per square foot, per plot ratio (psf, ppr) for the site (about 3.2% above the second highest bid by a joint venture of Hoi Hup Realty, Sunway Developments, and Oriental Worldwide Investments).
Prefab Requirement Increase Costs
The six bids were decreasing on recent tenders, most likely because of the requirement to use prefabricated, prefinished volumetric construction (PPVC). You can also place the fault with the location – fronting the Aye Rajah Expressway (AYE) and is a whopping 2km from the nearest MRT station, found in Clementi.
The bid at the end of the spectrum was by Singland Homes and Kheng Leong Co, at $236.9 million (only $415.69 psf, ppr).
“It will be one of the first sites to adopt PPVC for such a high-rise development,” said Mr. Desmund Sim, CBRE Research Head for Singapore and South-East Asia. “For many developers, a construction cost with PPVC is still a punt… but it is generally Lumina Grand expected to increase construction costs by a fair bit.”
West Coast Tender Prefab Requirements
The possible 595-home-yeilding site has a building height higher than any recently sold sites with the PPVC requirement. It must be noted – a mixed-use site in Yishun Avenue 4 sold in January, and a site in Jurong West Street 41 sold in March.
Lim Yew Soon, EL Development Managing Director, said the firm will likely build two blocks of 36-40 storeys each, mixing one to four bedrooms, cluster housing and townhouses.
Mr. Ong Teck Hui, JLL National Director of Research noted that this tender was in stark contrast to the site at nearby Waterfront@Faber before the Total Debt Servicing Ratio was imposed.
EL Development West Coast Vale Condo
There was a competition of 18 parties bidding for that site, concluding with a top big of $687 psf, ppr.
It was said that EL Development’s bid for the most recent side was a bit ‘cautious,’ given the challenging market conditions and sales at nearby projects.
Mr. Mak, SLP International Executive Director of Research, claimed the number of total unsold units left in similar condominiums nearby – just below 800 – was “not too excessive.”
There are no current, major condominium projects in the surrounding area of Clementi still to be launched for sale, which keeps EL Development in favour. The projected condo’s price could be between $1,200 to $1,300 psf.