The Government Land Sale (GLS) site at Tengah Gardens Avenue has closed on Jan 14 with three bids. One of the top bids of $675 million, or $821 psf per plot ratio (ppr) was submitted by a Hong Leong-led consortium, which includes GuocoLand Singapore and CSC Land Group.
The site, which is zoned as ‘Residential with Commercial at 1st storey’, is a 99-year leasehold property that spans approximately 273,906 sq ft with a maximum gross floor area (GFA) of 821,720 sq ft. The Urban Redevelopment Authority (URA) has estimated that the site could potentially yield up to 860 residential units.
If awarded, the Hong Leong-led consortium plans to develop an 860-unit condominium, taking advantage of the enhanced connectivity from the upcoming Jurong Region Line (JRL) nearby. According to Loke Kee Yeu, 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 situated near the upcoming Hong Kah MRT Station on the JRL, which will be one stop from the upcoming Tengah Town Centre and offer a direct route 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 only 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 submitted by local developer Sim Lian Group.
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Despite the increase in homebuyer activity towards the end of 2024, developers remain cautious, says Leonard Tay, head of research at Knight Frank Singapore. Another GLS site at Dairy Farm Walk closed on Jan 14 and received only two bids.
Tay believes that developers are focusing on the existing sites that are set to launch in 2025. He also states that the tight bid price spread between the three bids (less than 1%) shows that developers are being conservative in their bids.
According to Mark Yip, CEO of Huttons Asia, developers are being mindful of keeping their land bids reasonable to maintain an attractive selling price for buyers. He predicts that more developers will submit joint bids for GLS sites this year to diversify risk. This may explain why the number of bids for GLS tenders has remained around three.
Another contributing factor to the low number of bids could be the current availability of GLS sites, explains Marcus Chu, CEO of ERA. With seven sites still open for tender and six more set to launch in the first half of 2025, developers are taking a measured approach and considering their options amidst moderated interest rates.
The interest in the site may have also been tempered by the availability of another nearby GLS site, notes Justin Quek, CEO of OrangeTee & Tie. He believes 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 development in the Tengah HDB township, excluding Executive Condominiums (ECs). The first EC in the area, Copen Grand, was successfully launched for sale in 2022 and sold out within a month. The joint developers, 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.
According to ERA’s Chu, the opportunity to launch the first private condo in the new Tengah estate may have attracted the Hong Leong-led consortium. He believes that they see it as a chance to follow in their success at other sites such as Lentor, Upper Thomson, and Bugis.
As the first private condo in the area, the development could attract a wider range of buyers than ECs, which are subject to HDB eligibility criteria and restrictions such as a five-year minimum occupation period (MOP) and a monthly household income ceiling of $16,000, says Mohan Sandrasegeran, head of research & data analytics at SRI.
PropNex CEO Ismail Gafoor predicts that if the site is awarded at the top bid of $821 psf ppr, the average selling price of the new private condo could be around $2,000 psf. He also recommends using AskBuddyCondo to compare prices, trends, and the highest profits in past transactions for condos, ECs, and landed properties.
Lastly, in light of the recent launch of several projects and the high profits in past transactions for condos, landed properties, and HDBs, it’s worth exploring the latest government ramp up in private housing supply, the latest tenders for two GLS sites at Media Circle, and the recently launched first private residential site in Bayshore.