At the close of the tender, after receiving a mere six bids, a land parcel for private, residential development at West Coast Vale created a sub-par response. Property analysts have said it reflects a more selective approach because of the conservation of financial resources, holding off for more lucrative sites.
The second highest bid, Sunway Developments and Oriental Worldwide Investments, tabled by a group comprising Hoi Hup Realty, turned out to be about 3.2% lower than the highest bid, tabled by EL Development. The Urban Redevelopment Authority, the top bid, totaled at $314.1 million, which is about $551 per square foot, per plot ratio (psf, ppr).
West Coast Vale Tender
The sum of the offers proposed for West Coast Vale, being the final residential site in the Confirmed List of the Government Land Sales (GLS) Programme for the first half of the year, was the lowest since the tender a year prior, for the condominium site at Fernvale Road, stated Mr. Nicholas Mak, Executive Director of Research & Consultancy at SLP International Property Consultants.
$551 psf, ppr is also the lowest bid since the tender for the condomiunium site at Tampines, Avenue 10. The site was able to keep afloat with the price of $483 psf, ppr, but unfortunately sank in April of this past year.
“One possible reason for the relatively low number of bids is that among the six residential sites of the Confirmed List of the GLS Programme for 1H2015, the land parcel at West Coast Vale is one of the less attractively located sites. Furthermore, some developers may be conserving their financial resources for the coming tenders – some of the more attractive sites in the GLS Programme,” said Mr. Mak.
New Tender by EL Development West Coast
The 99-year leasehold site will yield about 595 new residential units, with a site area of 203,531 sq. ft., a plot ratio of 2.8 and a Holland Drive Condo maximum gross floor area of 569,895 sq. ft.
Though there are no MRT stations within close enough proximity for walking, the site is near numerous commercial amenities, including Westgate, Jem and Big Box at the Jurong Lake District.
Mr. Mak projects that units at the West Coast Vale site will be launched somewhere between $1,200 and $1,300 psf.
The top bid by EL Development for the West Coast Vale site is quite similar to the price of IOI Properties aquiring the Jalan Lempeng site in January of 2012 – comparable to the other winning bids of GLS land tenders in the Clementi Planning Area of the last four years. However, it is still about 25% lower than the price of Faber Walk, the new location of Waterfront@Faber. The ardently challenged site at Faber Walk, gathering about 18 bids, came to a close right before the Total Debt Servicing Ratio (TDSR) framework came into effect, in late June of 2013.
EL Development West Coast Vale Condo
“The (West Coast Vale) site fronts the Aye Rajah Expressway (AYE) and is also not near any MRT station,” said Mr. Eugene Lim, Key Executive Officer at ERA. “Further, in view of substantial 18,275 units of private residential units with sale licenses but are unsold, developers’ interest for this site may as such be more conservative. Going forward, we expect developers’ interest in land tenders to be increasingly more selective, depending on the location and attributes of the sites put up for tender.”
EL Development is the developer of the concerning Trivelis Design, Build and Sell Scheme (DBSS) flats at Clementi, where the majority of residents at the whopping 888-unit development have complained about several defects and low quality of their once-hopeful new flats.
To restore comfort with the residents, EL Development did offer a goodwill package to accommodate all of the issues raised.