The Urban Redevelopment Authority stated on Tuesday that two residential with commercial at first floor land plots at Slim Barracks Rise were released for sale under the confirmed list of the first half 2021 government land sales (GLS) program (URA).
When the tenders conclude at noon on September 28, 2021, Nicholas Mak, head of ERA Singapore’s research and consulting department, predicts that the land parcels will each get a maximum offer of between S$1,080 and S$1,180 per square foot per plot ratio (psf ppr), with 10 to 15 offers.
He claims that since the land parcels are tiny in comparison to other GLS sites, they would appeal to small and medium-sized developers, resulting in a larger number of bids. Mr Mak pointed out that tiny sites make only a tiny percentage of the GLS program.
The plots’ “palatable size,” according to Lee Sze Teck, director of research at Huttons Asia, would entice about 10 developers to compete for the land parcels, albeit at a price range of between S$1,200 and S$1,300 psf ppr.
Slim Barracks Rise (Parcel A) would be the more desirable of the two land plots, owing to its normal plot size and proximity to Buona Vista MRT station, but both are tempting for their excellent position in the one-north district, quite near to the planned One Holland Village.
“The grouping of two properties for sale in the same region is likely to temper developer land offers,” Mr Lee added.
Given the modest sizes of both sites and the identical closing tender dates, Wong Xian Yang, director of research for Cushman & Wakefield in Singapore, said a developer might seek to win both sites to minimize future competition and gain greater economies of scale.
The two property lots may possibly produce a total of 405 residential units when combined. Parcel A at Slim Barracks Rise is 7,957.3 square metres (sq m) in size, with a maximum gross floor area of 23,872 sq m; Parcel B at Slim Barracks Rise is 5,936.6 sq m in size, with a maximum gross floor area of 12,467 sq m.
“This would equate to S$277.5 million to S$303.2 million for Slim Barracks Rise (Parcel A), and S$145 million to S$158.3 million for Slim Barracks Rise (Parcel B),” Mr Mak added, based on his bid price projections.
He thinks that the ground-level business space will add value to the building since business space often fetches greater rates than residential space on the same level.
Each development’s commercial area must be held under a single strata lot, preventing sub-division for separate sales of numerous small retail lots.
Mr Mak said that this would not detract from the appeal of these two locations to developers. Instead, it will increase the likelihood that the commercial space in each development will be better planned and managed under a single ownership structure.
“If both sites were built by different developers, the rivalry could even bring out the creative retail mix in each development’s commercial area, which would benefit consumers,” he said.
Mr Lee thinks that since the two pieces of property are not adjacent, a scenario where one developer secures both plots and achieves economies of scale and monopoly in the region would be avoided.
The sales launch, according to the URA, is part of JTC Corporation’s ongoing efforts to increase residential space in the one-north estate.
JTC aims to fulfill housing requirements while also promoting the region as a mixed-use business park that fosters research, innovation, and entrepreneurship.
Mr Mak remembers that the procurement for an earlier residential site at Slim Barracks Rise ended in September 2019 after receiving nine offers. The land was turned into one-north Eden, with apartments selling for about S$2,000 per square foot on average.
According to Mr Lee, the development sold more than 80% of its apartments on the first day of sales and is almost 90% sold as of end-May 2021.
“There is an obvious demand for houses in the one-north precinct after the successful launch on One-North Eden” he added.
