The tender for the Government Land Sale (GLS) site located at Tengah Gardens Avenue closed on January 14 with three bids. The top bid of $675 million was submitted by a consortium led by Hong Leong, which includes GuocoLand Singapore and CSC Land Group. This bid translates to $821 per square foot per plot ratio (psf ppr).
The site, which is zoned for “Residential with Commercial at 1st storey”, has a 99-year leasehold and spans approximately 273,906 square feet with a maximum gross floor area (GFA) of 821,720 square feet. The Urban Redevelopment Authority (URA) estimates that the site has the potential to 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, 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 strategically located near the upcoming Hong Kah MRT Station on the JRL. It is also only one stop away from the upcoming Tengah Town Centre and provides a direct route to the second Central Business District (CBD) at Jurong Lake District.
Despite the acceleration of homebuyer activity in late 2024, developers’ sentiment remains cautious, according to Leonard Tay, the head of research at Knight Frank Singapore. Another GLS site at Dairy Farm Walk also closed on January 14 with only two bids.
Tay believes that developers may have decided to focus on existing sites that are currently being prepared for launch in 2025. He also points out that the tight bid price spread between the three bids (less than 1%) indicates that developers are being more conservative in their bids.
Mark Yip, the CEO of Huttons Asia, believes that developers are conscious of keeping their land bids reasonable to maintain an attractive selling price for potential buyers. He also expects more property developers to submit joint bids for GLS sites this year to diversify risk. This may be one reason why the number of bids for GLS tenders has been around three.
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. With seven sites still open for tender and six more to be launched in the first half of 2025, developers may be taking a measured approach and weighing their options amid moderated interest rates.
The interest in the Tengah Gardens Avenue site may have also been tempered by the availability of another nearby GLS site, notes Justin Quek, the CEO of OrangeTee & Tie. Developers may be considering bidding on a different GLS site along Lakeside Drive and Lakeside MRT, which is scheduled to launch in April 2025.
If awarded, the Tengah Gardens Avenue site will be the first private residential development (excluding Executive Condominiums) in the Tengah HDB township. The first EC in the estate, Copen Grand, was launched for sale in 2022 and sold out within a month. The joint developers, City Developments Ltd (CDL) and MCL Land, secured the site with a winning bid of $400.32 million, or $603 psf ppr, in May 2021.
ERA’s Chu believes that the opportunity to launch the first private condo in the new Tengah estate may have attracted the Hong Leong-led consortium. They see this as an opportunity to establish a presence in Tengah, after making forays into sites in 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. These include a five-year minimum occupation period (MOP) and a monthly household income ceiling of $16,000, according to Mohan Sandrasegeran, the head of research & data analytics at SRI.
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The Tengah Gardens Avenue site is also located within 2km of the future Anglo-Chinese School (Primary), according to Ismail Gafoor, the CEO of PropNex. With the school set to become a co-ed school in 2030, the site’s proximity could be 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 of the new private condo could be around $2,000 psf. This may also attract the attention of buyers who are interested in making a profit on their investments, especially since the property market has been seeing a rise in transaction volume and prices.