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TWO suburban residential sites saw modest interest and mostly measured bids when government tenders closed on Tuesday (Jan 14), with developers still taking a conservative tack under the current economic climate and bumper crop of land sale sites expected this year.

The first private housing site to be offered in upcoming new estate Tengah attracted three bids, topped by a Hong Leong-led group at S$675 million or S$821 per square foot per plot ratio (psf ppr).

Meanwhile, a Dairy Farm Walk parcel for 540 units secured two bids, with the top bid of S$504.5 million (S$1,020 psf ppr) from a consortium led by Santarli Construction outgunning the second bid from Sim Lian Group by 23 per cent.

The overall lukewarm interest, coming after a robust pickup in new home sales in the last quarter, pointed to developers remaining selective ahead of more attractive sites coming up in the government land sales (GLS) programme, amid still-high construction costs and financing costs, said Tricia Song, CBRE head of research for South-east Asia.

Huttons Asia chief executive officer Mark Yip said: “They may be waiting for the more attractive sites like Bayshore Road, Chencharu Close, Hougang Central and Telok Blangah Road (which have been or will be released for sale this year).” 

Altogether, seven plots are still open for tender on the 2024 GLS timetable, and six more will be launched in the first half of 2025, noted Marcus Chu, CEO of ERA. 

Huttons Asia’s Yip added: “Faced with high costs, developers are mindful to keep their land bids reasonable, so that they can maintain an attractive selling (price) to buyers.”

Developers are also likely to continue forming consortiums to jointly bid for GLS sites and “spread the risk”, he said.

Song of CBRE noted that bids for the Tengah Garden Avenue plot were tight, with just a 1 per cent difference between the highest and lowest ones. 

The top bid was a mere S$6 psf ppr or 0.7 per cent over the next bid of S$670.1 million (S$815 psf ppr), from Kingsford Group. Sim Lian Group came in third with S$668 million (S$813 psf ppr).

Bidding came in at the lower end of analysts’ expectations of S$800 to S$980 psf ppr for the Outside Central Region (OCR) project. Consultants had anticipated two to four bids for the for 25,458.4 square metre site, the first private residential site in an area where sites have already been sold for executive condominiums.

Justin Quek, CEO of OrangeTee & Tie, said: “Interest in this site may also have been moderated by the current unsold inventory from the nearby Jurong Lake area and an upcoming GLS site (in the area), which will be launching in April.”

Knight Frank research head Leonard Tay added that even though Tengah is “untested territory”, the project is likely to pique the interest of first-time homebuyers and public housing upgraders, thanks to its vicinity to Anglo-Chinese School (Primary) and accessibility in the future.

Other EC projects in the area have drawn healthy demand

A Plantation Close land parcel,  which garnered four bids, was awarded to a Hoi Hup Realty-Sunway Developments joint venture for S$423.4 million or S$701 psf ppr last year.  

The project, Novo Place, was launched for sale in November 2024. It has since sold 89 per cent, or 447 units, of its 504 units at a median price of S$1,652 psf.

Another EC project in the vicinity, the 639-unit Copen Grand, recorded a healthy take-up rate of 73 per cent when it launched in October 2022, noted PropNex CEO Ismail Gafoor. The units there sold at an average price of S$1,300 psf then, and the development was fully sold a month after launch. 

Hong Leong Holdings projects general manager Loke Kee Yeu said in a statement on Tuesday evening that the company, together with its partners CSC Land Group (Singapore) and GuocoLand, intends to build a 860-unit condominium if awarded the Tengah Garden Avenue site. 

“Future residents can leverage the upcoming Jurong Region Line for enhanced connectivity, and contribute to the growing development on the new Tengah estate,” he said. 

With a land cost of S$821 psf ppr, observers expect the Tengah Garden Avenue condo to be priced around S$2,000 psf or more, with a breakeven cost of about S$1,900 psf. 

The plot is zoned for residential use, with commercial use on the first storey, and has a maximum gross floor area of 76,376 sq m.

Santarli bullish on Dairy Farm project

The other tender that closed on Tuesday for the site on Dairy Farm Walk attracted two bids from developers, with a top bid of S$504.5 million or S$1,020 psf ppr from a consortium comprising Santarli Construction, Apex Asia Group, Soon Li Heng Civil Engineering and Kay Lim Realty.

The group outbid the only other bidder, Sim Lian Group, by about 23 per cent.

Its bid was also 4 per cent higher than the bid for an earlier Dairy Farm Walk site, which was sold in March 2022 at a land rate of S$980 psf ppr, said Knight Frank’s Tay. The plot, where the 386-unit The Botany at Dairy Farm condominium now stands, drew seven bids then.

Tuesday’s top bid of S$1,020 psf ppr surpassed expectations polled by The Business Times before the tender closed. Consultants had expected to see bids ranging from S$800 to S$950 psf ppr.

PropNex’s Gafoor said expectations were relatively muted due to its low accessibility and the high supply of private homes in the area, which could have “absorbed some of the existing demand”. 

Song from CBRE suspects that the developers were encouraged by the “near sell-out” at The Botany at Dairy Farm. The project sold more than 40 per cent of its units, or 160 units, at a median price of S$2,012 psf last year. 

Nicholas Mak, chief research officer at Mogul.sg, pointed out that there is a significant catchment of potential buyers in the area, which has a total of 13,862 condo units and 21,820 public housing flats within 2 km of the Dairy Farm Walk site. 

Located at the junction of Dairy Farm Walk and Petir Road, the land parcel stretches 21,881.8 sq m with a maximum gross floor area of 45,951 sq m. It is the fourth GLS site released for sale in the area. 

Analysts expect the upcoming condo to have a breakeven cost of S$1,900 to S$2,000 psf, with launch prices starting at S$2,100 psf.