The tender for the Government Land Sale (GLS) site at Tengah Gardens Avenue saw a total of three bids, with a Hong Leong-led consortium emerging as the top bidder with a bid of $675 million. The 99-year leasehold site, which is zoned for residential and commercial use, measures approximately 273,906 sq ft and has a maximum gross floor area (GFA) of 821,720 sq ft. This could potentially yield up to 860 residential units, according to estimates by the Urban Redevelopment Authority (URA).
The consortium, which includes GuocoLand Singapore and CSC Land Group, plans to build an 860-unit condo on the site. The development will take advantage of the enhanced connectivity from the upcoming Jurong Region Line (JRL) situated nearby. This will contribute to the growing development of the new Tengah estate, as stated by Loke Kee Yeu, the general manager (Projects) at Hong Leong Holdings Limited.
The site is located near the future Hong Kah MRT Station on the JRL, which will be one stop from the upcoming Tengah Town Centre. It will also provide 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 submitted by Chinese developer Kingsford Group. Local developer Sim Lian Group submitted the third and final bid of $812 psf ppr. The close bid price spread of less than 1% indicates that developers are being cautious and conservative with their bids, according to Leonard Tay, head of research at Knight Frank Singapore. This may be due to the acceleration of homebuyer activity in 2024 and developers’ focus on existing sites that are being prepared for launch in 2025.
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Mark Yip, CEO of Huttons Asia, believes that developers are keeping their land bids reasonable to maintain an attractive selling quantum for buyers. He also expects more joint bids for GLS sites this year in order to diversify risk. This could be one of the reasons that the number of bids for GLS tenders has remained around three.
Another factor contributing to the low number of bids could be the current availability of GLS sites, says Marcus Chu, CEO of ERA. With seven sites still open for tender and six more to launch in the first half of 2025, developers are taking a measured approach and weighing their options amid moderated interest rates.
Interest in the site may also have been tempered by the availability of another nearby GLS site, notes 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 to launch for tender in April 2025.
If awarded, the Tengah Gardens Avenue site will be the first private residential site (excluding Executive Condominiums) in the Tengah HDB township. In 2022, the first EC in the estate, Copen Grand, sold out within a month of its launch by joint developers City Developments Ltd (CDL) and MCL Land. The joint developers had secured the EC site with a winning bid of $400.32 million, or $603 psf ppr, in May 2021.
The opportunity to launch the first private condo in the new Tengah estate may have attracted the Hong Leong-led consortium. “Having made successful bids for sites at Lentor, Upper Thomson, and Bugis, they see this as an opportunity to do the same in Tengah,” says Chu.
The site is located within 2km of the future Anglo-Chinese School (Primary), making it very attractive to families with school-aged children, according to Ismail Gafoor, 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.