SINGAPORE – A joint venture between GuocoLand, Hong Leong Holdings’ Intrepid Investments and CSC Land Group put in the highest bid of $435.2 million for the sixth private housing site to be sold at Lentor Central in Yio Chu Kang.
The bid for the 475-unit Lentor Central site, which works out to $982 per sq ft per plot ratio (psf ppr), is 0.3 per cent lower than the $486.8 million – or nearly $985 psf ppr – paid by GuocoLand and Hong Leong for a neighbouring plot at Lentor Gardens in April.
An entity linked to Frasers Property came in second at $410.8 million, or $927 psf ppr, 5.9 per cent lower than the top bid for the Lentor Central site.
The Urban Redevelopment Authority’s provisional tender results were released on Tuesday.
“These two bids reflect the increasingly defensive sentiment among developers, and the fact that the Lentor area may have too many condominium projects, all being developed within a few years of each other,” said Knight Frank Singapore’s head of research Leonard Tay.
Hong Leong and GuocoLand have already secured four sites in the Lentor precinct, either on a single or joint basis, said real estate consultancy Edmund Tie. Including the Lentor Central site, the six plots in this locale could yield nearly 3,000 new private homes in the next four or five years.
Ms Chia Siew Chuin, head of residential research at JLL Singapore, said the lukewarm participation for the Lentor Central site reflected the reduced risk appetite of developers amid a potential supply glut in the Lentor locale as well as heightened market risks.
Also muting bids were high development costs; modifications to the gross floor area definition, which reduce the amount of sellable space and potential profits; as well as recent property cooling measures.
“The dominance of GuocoLand and Hong Leong in the area also likely steered some developers away,” Ms Chia added.
Mr Justin Quek, deputy chief executive officer of OrangeTee & Tie, said some developers may be holding back because of macroeconomic uncertainties, elevated interest rates and construction costs, and as more land could be released in 2024.
“With a top land rate of $982 psf ppr and the modifications to the gross floor area definition, we anticipate that the potential average selling price could still hover at around $2,100 psf,” said Ms Wong Siew Ying, PropNex’s head of research and content.
Meanwhile, an entity linked to City Developments (CDL) submitted the highest bid of $294.9 million, or $904 psf ppr, for a 350-unit plot at Champions Way in Woodlands – an area with less new private residential supply. This trumped the bids of five other bidders.
If awarded the site, CDL plans to build a residential project comprising four blocks of 11 storeys with about 350 residential units, an early childhood development centre and a basement carpark.
Its bid is 8.3 per cent above the second-highest bid of $272.3 million.
The bullish CDL bid could be due to “the impending completion of the Singapore-Johor Rapid Transit System (RTS), which will dramatically improve connectivity between Singapore and Johor”, said Mr Lam Chern Woon, head of research and consulting at Edmund Tie.
He noted that prices of homes in Woodlands could be re-rated when the RTS is completed in 2026.
Other factors include the growth of the Woodlands Regional Centre – the largest economic hub in the northern region – and pent-up demand, given that the last private condo launch in Woodlands was Parc Rosewood in 2012.
PropNex’s Ms Wong noted that several bids were “on the low side of below $750 psf ppr, which may indicate developers’ assessment of risks in the locale. In addition, as the land parcel is located above an existing MRT line, there could be additional construction costs incurred”.
Nonetheless, rising Housing Board home prices in Woodlands could support HDB upgrader demand for the new launch in Champions Way, said Mr Eugene Lim, ERA’s key executive officer.
With the ongoing transformation of Woodlands Regional Centre, more jobs could be created and help drive demand for the future condo project in Champions Way, he said.
While market sentiment has turned cautious for private condo sites, Ms Wong pointed to more active bidding interest for executive condominium sites such as the one at Plantation Close in Tengah, which hit a record land rate of $703 psf ppr in a tender that drew nine bidders.
On Monday, HDB awarded Hoi Hup Realty and Sunway Developments an exec condo site in Tengah for $348.5 million, or $703 psf ppr – a record high for exec condo land.
The tender for the 495-unit site drew nine bids from entities linked to CDL, Frasers Property, Hong Leong and CapitaLand Development.
The Hoi Hup-Sunway bid smashed the previous record of $661.7 psf ppr set by the Bukit Batok West Avenue 8 exec condo plot (now Altura EC) awarded in March 2022. The bid was also 17 per cent higher than the $603 psf ppr price for the site of Copen Grand in Tengah Garden Walk by CDL and MCL Land.
“Confidence is likely fuelled by the strong sales momentum in recent exec condo launches within the Tengah area in the past year,” said DBS Bank analysts Rachel Tan and Derek Tan.
They noted that the 639-unit Copen Grand, which is near Plantation Close, “was sold out within one month of its launch in October 2022 at an average price of $1,300 psf, while the Altura, after its launch in August 2023, is now about 63 per cent sold (226 out of 360 units)”.
Mr Lee Sze Teck, Huttons Asia’s senior director of data analytics, said: “With the recent increase in additional buyer’s stamp duty for a second residential property purchase, exec condos are likely to see more interest as buyers are given upfront remission.”
Join ST’s Telegram channel and get the latest breaking news delivered to you.
content: ” “;
font-family: “SelaneWebSTForty”, Georgia, “Times New Roman”, Times, serif;