The bidding for the Government Land Sale (GLS) site at Tengah Gardens Avenue closed on January 14 with three bids. A consortium led by Hong Leong, which includes GuocoLand Singapore and CSC Land Group, submitted the highest bid of $675 million, which translates to $821 per square foot per plot ratio (psf ppr).
The site, which has a 99-year lease and covers an area of approximately 273,906 square feet, is zoned for “Residential with Commercial at 1st storey” and has a maximum gross floor area (GFA) of 821,720 square feet. According to URA, it has the potential to yield up to 860 residential units.
If awarded, the Hong Leong-led consortium plans to build an 860-unit condo, taking advantage of the upcoming Jurong Region Line (JRL) nearby which will enhance connectivity. This will contribute to the development of the new Tengah estate, as stated by Loke Kee Yeu, general manager (Projects) at Hong Leong Holdings Limited.
The Tengah Gardens Avenue site is strategically located near the upcoming Hong Kah MRT Station on the JRL, making it one stop away from the upcoming Tengah Town Centre and providing a direct route to the second 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 bidder’s bid of $815 psf ppr, submitted by Chinese developer Kingsford Group. Local developer Sim Lian Group submitted the third and final bid of $812 psf ppr. This close bid price spread of less than 1% indicates that developers are being conservative in their bids, even with the increase in homebuyer activity at the end of 2024, according to Leonard Tay, head of research at Knight Frank Singapore.
Another GLS site at Dairy Farm Walk also closed on January 14 and received two bids. Tay also mentioned that developers may have focused on existing sites that are preparing for launch in 2025. This could be a reason why the number of bids for GLS tenders has been around three.
Mark Yip, CEO of Huttons Asia, believes that developers are keeping their land bids reasonable in order to maintain an attractive selling quantum for buyers. He expects more developers to submit joint bids for GLS sites this year to diversify risk. This could also be a reason why the number of bids for GLS tenders has been around three.
Marcus Chu, CEO of ERA, says that another reason for 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 are taking a cautious approach and considering their options amid moderated interest rates.
Investing in real estate in Singapore heavily relies on the location of the property. This is especially evident as condos situated in central areas or near important amenities such as schools, shopping malls, and public transportation hubs hold a higher potential for appreciation in value. Some of the most sought-after areas for property investment in Singapore include Orchard Road, Marina Bay, and the Central Business District (CBD), where properties have continuously shown strong growth in value. Moreover, condos located near reputable schools and educational institutions make them even more desirable for families, making them a solid investment option. Furthermore, with the addition of New Condo Launches, the potential for growth in these prime locations only continues to increase.
The interest in the Tengah Gardens Avenue site may also have been affected by the availability of another nearby GLS site, according to Justin Quek, CEO of OrangeTee & Tie. Developers may be considering bidding on a different GLS site along Lakeside Drive and Lakeside MRT, which is scheduled for tender in April 2025.
If awarded, the Tengah Gardens Avenue site will be the first private residential site (excluding Executive Condominium) in the Tengah HDB township. The first EC project in Tengah, 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 EC 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, as they have also made forays into other sites such as Lentor, Upper Thomson, and Bugis. The CEO of PropNex, Ismail Gafoor, states that the site’s proximity to the future Anglo-Chinese School (Primary), which will become a co-ed school in 2030, could be very attractive to families with school-aged children. PropNex estimates 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.