The tender for the Government Land Sale (GLS) site at Tengah Gardens Avenue closed on Jan 14 with three bids. A consortium led by Hong Leong, along with GuocoLand Singapore and CSC Land Group, submitted the highest bid of $675 million, translating to $821 psf per plot ratio (ppr).
Three bids were submitted for the Government Land Sale (GLS) site at Tengah Gardens Avenue, with the top bid of $675 million coming from a consortium led by Hong Leong, along with GuocoLand Singapore and CSC Land Group. This translates to $821 per square foot (psf) per plot ratio (ppr). The 99-year leasehold site, which is zoned for “Residential with Commercial at 1st storey”, spans approximately 273,906 square feet and has a maximum gross floor area (GFA) of 821,720 square feet. The Urban Redevelopment Authority (URA) has estimated that the site can potentially yield up to 860 residential units.
If awarded, the Hong Leong-led consortium plans to build an 860-unit condominium, making use of the enhanced connectivity provided by the upcoming Jurong Region Line (JRL) nearby. This will contribute to the development of the new Tengah estate, according to Loke Kee Yeu, general manager (Projects) at Hong Leong Holdings Limited.
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The Tengah Gardens Avenue site is located near the upcoming Hong Kah MRT Station on the JRL, which will be one stop from the upcoming Tengah Town Centre and offer 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 only 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. This narrow bid price spread of less than 1% indicates that developers are being conservative in their bids, possibly due to cautious sentiment despite the recent increase in homebuyer activity, according to Leonard Tay, head of research at Knight Frank Singapore. Another GLS site at Dairy Farm Walk which closed on the same day received only two bids, possibly indicating that developers are focusing on existing sites that are being prepared for launch in 2025.
Mark Yip, CEO of Huttons Asia, adds that developers are keeping their land bids reasonable to maintain an attractive selling quantum for buyers. He expects to see more joint bids for GLS sites this year as a way for developers to diversify risk. This could be one reason why the number of bids for GLS tenders has been hovering around three.
Marcus Chu, CEO of ERA, also points to the current availability of GLS sites as a possible reason for the low number of bids. 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 considering their options amid moderated interest rates.
Justin Quek, CEO of OrangeTee & Tie, notes that the availability of another nearby GLS site along Lakeside Drive and Lakeside MRT may have also tempered interest in the Tengah Gardens Avenue site. Developers may be considering bidding for that site instead, which is scheduled to be launched for tender in April 2025.
Should the site be awarded at the top bid of $821 psf ppr, the average selling price for the new private condominium could be around $2,000 psf, according to PropNex. This could be very attractive to families with school-aged children, as the site is situated within 2km of the future Anglo-Chinese School (Primary). The school is set to become co-ed in 2030, making the site’s proximity even more appealing to potential buyers, adds Ismail Gafoor, CEO of PropNex.
The Tengah Gardens Avenue site will also be the first non-EC private residential site in the Tengah HDB township. The estate’s first EC, 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. The opportunity to launch the first private condominium in the new Tengah estate may have been a major factor in attracting the Hong Leong-led consortium, as they see it as a chance to replicate their success in other sites such as Lentor, Upper Thomson, and Bugis.
Overall, developers seem to be taking a cautious approach in their bids for GLS sites, possibly due to the current availability of sites and moderated interest rates. However, the Tengah Gardens Avenue site still holds great potential, especially as the first private residential site in the new Tengah estate. With its prime location near upcoming amenities and schools, it could be an attractive option for developers and buyers alike.