Ravi Chandran
Colliers International, a leading commercial real estate services company, said that it is relaunching the collective sale tender for freehold development Grange Heights in St. Thomas Walk on 23 January 2019.
The redevelopment site in District 09 has a reserve price of SGD820 million – unchanged from the tender price when it was originally put on the market on 18 September 2018.
This works out to a land rate of SGD1,948 per square foot per plot ratio (psf ppr) after factoring the 10% bonus balcony Gross Floor Area (GFA). Developers can still achieve up to 10% bonus GFA beyond the Master Plan-allowable Gross Plot Ratio by qualifying for other incentive schemes, such as the Green Mark Bonus GFA Scheme and the new Indoor Recreation Space Bonus GFA Scheme. No development charge is payable for site owing to its high development baseline.
Nestled in a prestigious residential enclave, it is within walking distance to the Orchard Road shopping district and near the Somerset MRT station on the North-South Line. Come 2021, the completion of the Great World MRT station – which is just 250m from the site – will offer enhanced connectivity to the Northern and Eastern parts of Singapore via the upcoming Thomson-East Coast Line. An exciting array of entertainment, lifestyle, F&B and education offerings is also within easy reach – including the River Valley Primary School which is within 1 km from the site.
Ms Tang Wei Leng, Managing Director at Colliers International, said, “The Grange Heights site has excellent attributes which will appeal to both local and expatriate buyers and should be well sought-after in view of the limited number of new launches within its immediate vicinity. In addition, we believe it presents an opportunity for the developer to position itself for future market uplift when new supply completion shrinks substantially beyond 2023.”
Colliers Research expects the bulk of upcoming residential projects – from sites acquired via collective sale and public tender in 2017/2018 – will likely be completed in 2022. It estimates that annual new supply completion would trend below the 10-year historical average supply of 12,900 units from 2023, possibly resulting in limited competition for rents and capital appreciation.
Ms Tang added, “Luxury home prices have made a comeback in recent years and we expect home values in prime districts to remain relatively firm, supported by healthy buying interest from foreigners. We observed that foreign buyers accounted for 15.0% of overall private property transactions in the Core Central Region (CCR) in 2018 – up from 12.8% in 2017. In fact, the proportion of foreign buyers who have purchased CCR homes rose after the new cooling measures kicked in last July, making up 15.9% of transactions from August to December, compared with 14.6% in the first seven months of 2018.”
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Meanwhile, prices at the top-end of the market have been resilient and should bode well for the future development at Grange Heights.
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In particular, several luxury residential projects around the redevelopment site have enjoyed steady sales and improved pricing. For instance, New Futura and Martin Modern continued to sell well post the cooling measures at higher median prices even as stock depletes. Nearby 8 Saint Thomas – which was launched in August 2018 – saw sales improving into December 2018 at steady price point of SGD3,200 psf. Recent transactions support the trend: a unit was sold at SGD3,689 psf at New Futura this month, while another at 8 Saint Thomas was transacted at SGD3,259 psf in December.
Grange Heights comprises 114 apartments and maisonettes as well as six penthouses with sizes ranging from 1,884 sq ft to 4,575 sq ft. The redevelopment site – spanning 12,697.7 sq m (approx. 136,676 sq ft) – is zoned ‘Residential’ and has a Gross Plot Ratio of 2.8 under the Master Plan 2014.
The redevelopment site is not subject to an average unit size of 85 sq m as it is situated in the Central Area. This means the developer will be able to create a signature residential project that comprises a complimentary mix of modern format as well as larger apartments to cater to a wider group of buyers. Subject to approval from the authorities, the site can be redeveloped to offer up to 508 apartments of varying sizes.
Dr Ho Siew Lan, Chairman of the Grange Heights Collective Sale Committee, said, “The owners are well-aware of the shift in market sentiment since the new cooling measures kicked in last July. Therefore, we have agreed to keep the reserve price unchanged. We remain cautiously optimistic about the tender and draw confidence from Grange Heights’ competitive and realistic pricing as well as its exclusive location and superior site attributes.”
Colliers said that the prime site in District 09 offers the successful tenderer an opportunity to position itself for future market uplift when supply completion contracts substantially beyond 2023.
The Grange Heights collective sale tender will close at 3pm on 11 March 2019.
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