Recent land bids have been highly competitive, with record prices offered by developers. The keen interest in land acquisition has not gone unnoticed. Does this signal a potential increase in property prices in the near future?
Offer price $10 million above reserve price
The former HUDC, Tampines Court, has received an offer of $970 million for its 702,000 sq ft site. $10 million more than the $960 million reserve price set up for the collective sale. Should the deal be successful, each home owner will stand to receive between $1.7 million to $1.75 million. The collective sale committee is however still reviewing the offer as it comes with specific conditions. Tampines Court has about 69 years left on its lease. The Tampines Street 11 residential site consists of 560 units across 14 blocks, with units sized between 1,658 sq ft to 1,733 sq ft.
Collective sale marker performing well
This year has certainly been a good one for the collective sale market. Quite a few developments which have previously failed at en bloc attempts have found buyers this year, and some even closing the deal at higher than asking-prices. Tampines Court has tried their hand twice at the collective sale process, and perhaps the third-time luck may just strike. 6 en bloc sales have successfully closed this year – Serangoon Ville, The Albracca, One Tree Hill Gardens, Goh & Goh Building, Rio Casa and Eunosville. Out of these 6, four were former HUDCs. The total value of the 6 collective sales came up to $2.1 billion, more than double the $1 billion for the 3 deals closed last year.
Developers’ appetite for land has been voracious this year, but how long more will the good run last? Following this upturn in the land sales market will be a time of building, construction, and selling. How will the real estate market perform during that time?