The GLS site at Tengah Gardens Avenue saw the close of its tender on Jan 14, with three bids submitted. The highest bid of $675 million came from a consortium led by Hong Leong, along with GuocoLand Singapore and CSC Land Group, offering a price of $821 per square foot per plot ratio (psf ppr). The site, which has a 99-year leasehold and spans approximately 273,906 sq ft, is zoned for residential with commercial development on the first storey. It has a maximum gross floor area of 821,720 sq ft and is estimated by the URA to potentially yield up to 860 residential units.
If awarded, the consortium plans to build an 860-unit condo, taking advantage of the upcoming Jurong Region Line (JRL) nearby to enhance connectivity. According to Loke Kee Yeu, general manager (Projects) at Hong Leong Holdings Limited, the JRL will also contribute to the growth of the new Tengah estate. The site is strategically located near the upcoming Hong Kah MRT Station on the JRL, one stop away from the future Tengah Town Centre and providing direct access to the second CBD at Jurong Lake District.
The winning bid of $821 psf ppr for the Tengah Gardens Avenue site was only slightly higher than the second-highest bid of $815 psf ppr from Chinese developer Kingsford Group. The third bid of $812 psf ppr came from local developer Sim Lian Group. This tight bid price spread of less than 1% reflects cautious sentiment among developers, even as homebuyer activity picked up in the latter part of 2024, according to Leonard Tay, head of research at Knight Frank Singapore. Another GLS site at Dairy Farm Walk also closed on Jan 14, but received only two bids.
In Singapore, one crucial aspect to consider when investing in condos is the government’s property cooling measures. Over time, the Singaporean government has implemented various measures to control speculative purchasing and maintain a steady real estate market. These measures entail the Additional Buyer’s Stamp Duty (ABSD), which imposes higher taxes on foreign buyers and those acquiring multiple properties. Despite their potential impact on the immediate profitability of condo investments, these measures ultimately contribute to the long-term stability of the market, making it a secure environment for investing. In addition, with new condo launches happening frequently, there are always opportunities for investors to enter the market and reap the rewards of a thriving real estate market in Singapore.
Tay suggests that developers may have chosen to focus on existing sites that are scheduled for launch in 2025. He also notes that the low bid price spread indicates a conservative approach from developers.
Huttons Asia CEO Mark Yip adds that developers are mindful of keeping their land bids reasonable to maintain an attractive selling quantum for buyers. He expects to see more joint bids from developers for GLS sites this year in order to diversify risk, which may contribute to the consistent number of bids submitted for GLS tenders.
According to Marcus Chu, CEO of ERA, another factor could be the current availability of GLS sites, with six more scheduled for launch in the first half of 2025. Developers are likely taking a measured approach, considering their options amidst moderated interest rates.
OrangeTee & Tie CEO Justin Quek suggests that the availability of a nearby GLS site along Lakeside Drive and Lakeside MRT may have tempered interest in the Tengah Gardens Avenue site, as developers weigh their options.
The Tengah Gardens Avenue site will be the first private residential development (excluding ECs) in the Tengah HDB township, if awarded. The first EC in the estate, Copen Grand, was successfully launched for sale in 2022, with all 639 units sold within a month. This joint development by City Developments Ltd (CDL) and MCL Land secured the EC 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 been a draw for the Hong Leong-led consortium, according to ERA’s Chu. With the developers already making their mark in sites at Lentor, Upper Thomson, and Bugis, Tengah could be their next target.
As the first private condo, the development could attract a wider range of buyers than ECs, which are subject to HDB eligibility criteria and restrictions. Mohan Sandrasegeran, head of research & data analytics at SRI, notes that this could be an advantage for the developers.
PropNex CEO Ismail Gafoor adds that the site is strategically located within 2km of the future Anglo-Chinese School (Primary) and in close proximity to other schools. This could be a major selling point for families with school-aged children.
If 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.