The Government Land Sale (GLS) tender for the site at Tengah Gardens Avenue was closed on January 14, with three bids submitted. The top bid of $675 million, or $821 per square foot per plot ratio (psf ppr), was made by a consortium led by Hong Leong, which includes GuocoLand Singapore and CSC Land Group.
The 99-year leasehold site, which is zoned as ‘Residential with Commercial at 1st storey’, covers an area of approximately 273,906 square feet and has a maximum gross floor area (GFA) of 821,720 square feet. The Urban Redevelopment Authority (URA) predicts that the site could potentially yield up to 860 residential units.
If the consortium is awarded the site, they plan to build an 860-unit condominium that will take advantage of the enhanced connectivity from the upcoming Jurong Region Line (JRL) nearby. According to Loke Kee Yeu, the general manager (Projects) at Hong Leong Holdings Limited, the JRL will contribute to the growing development of the new Tengah estate.
The Tengah Gardens Avenue site is located near the upcoming Hong Kah MRT Station on the JRL, and it will be one stop from the upcoming Tengah Town Centre. It will also offer direct access to the second Central Business District (CBD) at Jurong Lake District.
The top bid of $821 psf ppr for the Tengah Gardens Avenue site is just 0.73% higher than the second-place bid of $815 psf ppr, which was submitted by Chinese developer Kingsford Group. The third and final bid of $812 psf ppr was made by local developer Sim Lian Group.
The low bid price spread of less than 1% indicates that developers are being cautious despite the increase in homebuyer activity towards the end of 2024, according to Leonard Tay, the head of research at Knight Frank Singapore. Another GLS site at Dairy Farm Walk received two bids on the same day.
Tay suggests that developers may have chosen to focus on existing sites that are being prepared for launch in 2025. He also points out that the small difference in bid prices shows that developers are being conservative in their bids.
Mark Yip, the CEO of Huttons Asia, believes that developers are being mindful of keeping their land bids reasonable in order to maintain an attractive selling price for buyers. He expects more developers to submit joint bids for GLS sites this year in order to diversify risk. This may be one of the reasons why there have only been three bids for recent GLS tenders.
According to Marcus Chu, the CEO of ERA, another factor contributing to the low number of bids could be the current availability of GLS sites. He notes that there are currently seven sites open for tender and six more to be launched in the first half of 2025. Developers may be taking a measured approach and considering their options with interest rates moderating.
Interest in the Tengah Gardens Avenue site may have also been tempered by the availability of another nearby GLS site, according to Justin Quek, the CEO of OrangeTee & Tie. He suggests that developers may be considering bidding on a different GLS site along Lakeside Drive and Lakeside MRT, which is scheduled to launch for tender in April 2025.
If awarded, the Tengah Gardens Avenue site will be home to the first private residential site (excluding Executive Condominiums) in the Tengah HDB township. The first EC in the estate, Copen Grand, was successfully launched for sale in 2022 and sold out within a month. It was jointly developed by City Developments Ltd (CDL) and MCL Land, who secured the site with a winning bid of $400.32 million, or $603 psf ppr, in May 2021.
The opportunity to launch the first private condo in the new Tengah estate may have attracted the Hong Leong-led consortium. According to Chu from ERA, the consortium may see this as an opportunity to replicate their successes from other projects, such as Lentor, Upper Thomson, and Bugis.
Being the first private condo in the area, the new development could attract a wider range of buyers compared to ECs, which have HDB eligibility criteria and restrictions such as a five-year minimum occupation period (MOP) and a monthly household income ceiling of $16,000. According to Mohan Sandrasegeran, the head of research and data analytics at SRI, the proximity of the site to the future Anglo-Chinese School (Primary), which is set to become a co-ed school in 2030, could also be very attractive to families with school-aged children.
If the site is awarded at the top bid of $821 psf ppr, PropNex estimates that the average selling price for the new private condo could be around $2,000 psf. This could make it one of the most expensive condominium developments in the area.
In conclusion, despite the cautious sentiment among developers, the Tengah Gardens Avenue site received a competitive bid, with a low bid price spread of less than 1%. As the first private residential development in the new Tengah estate, it is expected to attract interest from a wider range of buyers and could potentially become one of the most sought-after developments in the area.…