The bidding for the Government Land Sale (GLS) site at Tengah Gardens Avenue has concluded on January 14th with three bids submitted. A consortium led by Hong Leong, which includes GuocoLand Singapore and CSC Land Group, has submitted the top bid of $675 million, equivalent to $821 psf per plot ratio (ppr).
The 99-year leasehold site, which is zoned for both residential and commercial use, spans approximately 273,906 sq ft and has a maximum gross floor area (GFA) of 821,720 sq ft. According to the Urban Redevelopment Authority (URA), the site has the potential to yield up to 860 residential units.
If the bid is successful, the Hong Leong-led consortium plans to develop a 860-unit condo, taking advantage of the enhanced connectivity provided by the upcoming Jurong Region Line (JRL) in close proximity. Loke Kee Yeu, the general manager (Projects) at Hong Leong Holdings Limited, believes that the JRL will contribute to the development of the new Tengah estate.
The Tengah Gardens Avenue site is strategically located near the upcoming Hong Kah MRT Station on the JRL, which is only one stop away from the upcoming Tengah Town Centre and offers 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 just 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.
Despite the recent surge in homebuyer activity at the end of 2024, developers remained cautious in their sentiment, according to Leonard Tay, the head of research at Knight Frank Singapore. Another GLS site at Dairy Farm Walk also closed on January 14th, receiving only two bids.
Tay suggests that developers may have chosen to focus on existing sites that are due for launch in 2025, which may have contributed to the limited number of bids. He also notes that the tight bid price spread (less than 1%) between the three bidders indicates that developers are being more conservative in their bids.
Mark Yip, the CEO of Huttons Asia, believes that developers are being mindful of keeping their land bids reasonable to maintain an attractive selling price for buyers. He also expects to see more joint bids from developers for GLS sites this year in order to diversify their risks. This could be one of the reasons why the number of bids for GLS tenders has been hovering around three.
Marcus Chu, the CEO of ERA, suggests that the availability of GLS sites may also be a factor in the low number of bids. He explains that with seven sites still open for tender and six more scheduled to launch in the first half of 2025, developers are taking a cautious approach and weighing their options amidst moderated interest rates.
Justin Quek, the CEO of OrangeTee & Tie, also believes that the interest in the Tengah Gardens Avenue site may have been tempered by the availability of another nearby GLS site. He suggests that 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 home to the first private residential site (excluding Executive Condominiums) in the Tengah HDB township. The estate’s first EC, Copen Grand, was successfully launched for sale in 2022 and sold out within a month of its launch by joint developers, City Developments Ltd (CDL) and MCL Land. The winning bid for the EC site was $400.32 million, equivalent to $603 psf ppr.
According to Marcus Chu, being the first private condo in the new Tengah estate, the development could attract a wider range of buyers compared to 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. Mohan Sandrasegeran, the head of research and data analytics at SRI, also suggests that the opportunity to launch the first private condo in Tengah may have attracted the Hong Leong-led consortium. He believes that after venturing into sites at Lentor, Upper Thomson, and Bugis, they see this as a chance to do the same in Tengah.
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The site’s proximity to the upcoming Anglo-Chinese School (Primary) in 2030, which is set to become a co-ed school, may also be an attractive feature for families with school-aged children, according to Ismail Gafoor, the CEO of PropNex. 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.