Award of Tender for the Commercial and Residential site at Sengkang Central

Award of Tender for the Commercial and Residential site at Sengkang Central

Breaking recent news is an announcement by the Urban Redevelopment Authority-URA that two companies have been awarded the tender for a commercial and residential site at Sengkang Central, Singapore. The two, City Developments Ltd-CDL and CapitaLand managed to beat their other two shortlisted counterparts to bag the winning bid prized at $777.8 Million which translates to $923.6 per square foot per plot ratio- (psf ppr). These companies are now gearing to set base on the 3.7 hectares of land which holds the title for the largest commercial and residential tender ever won since 2015.

Background history of the winning tenderers

 The City developments Ltd was founded on September 7th, 1963 and in 1965 the company finished its first 200 housing unit project. From then on, the company continues to break new boundaries in its quest to acquire, develop and sell property.

On the other hand, one of Singapore’s most profound development companies is CapitaLand. With an unbeaten record and enviable portfolio, CapitaLand has built, serviced apartments, malls, homes, and offices spread across 150 cities in over 30 countries throughout the world. The company’s main works can be seen mainly in China and Singapore and slowly exploring other prime areas like Vietnam and Indonesia.

This joint venture aims at developing the awarded land into a one-stop shop with a total of 700 apartments, retail shops, hawker center, childcare areas, public rail and bus stop, and three floors housing the community club. The two companies intend to have this mega project completed by 2022.

Details of the Tender

The Sengkang Central tender project was unveiled on December 28th, 2017 and later closed June 21st, 2018. Seven concept proposals were forwarded by six companies with one of the companies forwarding two concept proposals. All participants were asked to present their tender prices in one envelope and the concept proposal in a different envelope.

At the shortlisting stage, the envelopes of the four successful contenders bearing the tender prices were opened. Thereafter the tenderer with the highest bid was awarded the rights to work on the project in question.

The project is considered prime owing to its favorable proximity to other Major sites in Singapore. For instance, the proposed community project will be located only 20 minutes away from the Central business district if you are driving and 25 minutes from the Dhoby Ghaut MRT Station.

Sengkang Hospital

Details regarding Concept Proposals

The Concept Evaluation Committee-CEC gave all six companies a chance to present their tenders before them. Thereafter, the CEC concluded that only four proposals were viable and were in line with all the requirements. The four shortlisted candidates included;

  1. The winners, City development Ltd and CapitaLand who set their bid at $777.8 Million
  2. Perennial Singapore and Qingjian Realty who proposed a bid of close to $682 Million
  3. Singapore Press Holdings and Kajima Development who proposed their bid at $636.39 million
  4. Wing Tai Holdings and Keppel Land bidding at $608.9 Million

 

In their proposals, the successful tenderers carefully demonstrated their building designs and layouts. They explained further how they would effectively cater to a large number of people who would regularly frequent the place. The winning proposal provided commendable solutions such as beautiful landscapes, pedestrian-friendly areas which would prove necessary in public places on the ground and first floors. They included well-designed spaces aimed at holding events and other types of gatherings.

Brief History of Sengkang

Sengkang Central was originally a fishing village known as Kangkar. In the mid-20th century, Sengkang was covered in numerous pepper, rubber and pineapple plantations. It was until 1994 when efforts began to turn the small town into a largely residential area. It was therefore divided into seven subzones which continue to undergo development to date. The first apartment building commonly known as a flat was built in 1997 in the Riverdale subzone. Now, there are numerous flats with over 65, 981 housing units in the whole of Sengkang. In a bid to turn it into a residential town, the Housing Development Board continues to approve numerous projects. Sengkang is located on the Northeast parts of Singapore and sits on prime fertile land, what with river Sungei Punggol and river Sungei Serragon, SengKang boasts of beautiful landscapes and vast greenery. The town has a population of over 232,100 people and sits on 22,000 Kilometers of land. The small town has a robust transport system that features private means, bus and the most preferred is the modern rail transport system.

Festive Period causes 28% drop in February for New Home Sales, due to absence of launches.

Festive Period causes 28% drop in February for New Home Sales, due to absence of launches.

According to the Urban Redevelopment Authority of Singapore, only 377 private homes were sold and transacted (excluding executive condominiums) in February. Analysts indicate that the drop in 28% drop in sales, from the 524 units sold in January, was attributed to the Chinese New Year festivities where developers held back their launches. The lack of inventory and supply for real estate private homes thus resulted in a drop in the hype and build up for potential purchase.

Ms Tan Siew May, a potential home-owner and buyer in the first quarter of 2018, spoke out to us that she is “waiting for an upcoming launch Margaret Ville in Queenstown before looking at other areas”. It seems that many buyers are waiting out this dull season before proceeding to dive into the property market, especially when most showrooms are currently unavailable.

In fact, there were only two new launches.

  1. Parksuites, a 119-unit project by Far East Organization in Holland Grove, soft-launched 50 units and sold three at a median price of S$2,215 psf.
  2. Nim Collection, a 99-year leasehold landed development, launched 26 units and sold three units as well, at a median price of S$1,661 psf.

Making a comparison with past year, Ong Teck Hui, national director of research & consultancy at JLL,  said Feb 2018’s figures were actually comparable to those in January 2017 – the Chinese New Year month last year. with some 108 units launched and 382 units sold then.

Huttons Asia - New Home Sales in Feb

“So the low-key performance in February is not indicative of a market slowdown,” he added. “Notwithstanding the festive period in February and the dearth of new launches, buyers were still house-hunting among previously launched projects, resulting in sales from these accounting for 98.4 per cent of total new private home sales during the month. This is indicative of ongoing interest among home buyers.”

Developers are not sitting back this period either. It was noted that the average psf for previously launched projects have rose, and they are expected to continue to time their launches to benefit from a further recovery in residential prices.

For example, median prices at Kingsford Waterbay at in Upper Serangoon have increased from S$1,111 psf in March 2015 to S$1,349 psf in Feb 2018. Grandeur Park Residences near Tanah Merah MRT has also seen its median price rise from S$1,406 psf at launch in March 2017 to S$1,487 psf in Feb 2018, as it reaches its 90-per-cent sold mark.

Year-on-year, sales suffered a 61.5% drop from the 979 units sold in Feb 2017. This is mainly due to the lack of ECs as there will only be two EC launches combined in both 2018 and 2019.

This also means the depleted supply was part of the main cause of the drastic fall in sales.

It is noteworthy to observe that the recent EC – Hundred Palms Residences that is situated at Yio Chu Kang Road, faced a high demand as the 531 units were sold out just under 7 hours last year. Excluding Rivercove Residences which is yet to be launched, there were only 212 unsold EC units in projects under marketing. This is only a small fraction of the 2,514 unsold EC units being marketed one year ago.

Analysts expect home buyers and upgraders to move quickly to purchase existing stocks of available EC units especially before prices start to increase, as anticipated to after the government sold the Sumang Walk EC site to a City Developments joint venture at a record land price of S$583 psf per plot ratio, which could translate to a break-even cost of close to $1,000 psf for its completed units.

If the market sentiment continues to remain sanguine through the year, the primary market sales could range between 11,000 and 14,000 private housing units in 2018.

About Author

This news update is written and submitted by Gary Lee, owner of margaretville.sg. Gary is an expert and experienced realtor who knows the Singapore market in and out. He specializes in HDB and Condominiums investing.