Pricing background

Emerald of Katong is a new condo development located in Jalan Tembusu, Singapore. The site was awarded to Sim Lian Land Pte Ltd and Sim Lian Development Pte Ltd in August 2023 by the URA. Interestingly, the only other tenderer for the site, a joint venture of CDL Constellation and Frasers Property Citrine, had bid $828,000,000, or barely 1% less.

Based on its URA Master Plan 3.5 plot ratio, the land cost works out to roughly SGD$1,069 per square foot per plot ratio (PSF PPR). This is a fair bit lower than the $1,302 PSF PPR land rate that CDL paid for the Tembusu Grand site just opposite. The difference could reflect market sentiment, given the more stringent ABSD rules that have dampened demand. However, some of the difference could also be due to URA’s new definition of floor area to include air-conditioner ledges into gross floor area. This eats into developers’ saleable floor areas, and thereby their profit margins.

In addition, the successful tenderer for this site is responsible for creating a 0.52 hectare public park on an adjacent site. They have to retain the nine rain trees on it, and comply with NParks and URA’s requirements. Building the park would further add to total development costs borne by the tenderer. This is further exacerbated by the currently high interest rates, and record-high construction and labour costs.