In the first state land tender of the year for a 99-year leasehold private housing site, a plot along Lentor Gardens in the Yio Chu Kang area received only one bid. GuocoLand, in collaboration with Hong Leong Holdings’ Intrepid Investments, submitted the bid of S$486.8 million, equivalent to nearly S$985 per square foot per plot ratio (psf ppr). Market observers attribute the subdued interest in the tender, which closed on April 4, to the potential oversupply in the Lentor Hills Estate area. The Urban Redevelopment Authority (URA) has released multiple sites in recent years, with more to come.
The GuocoLand-Intrepid bid fell at the lower end of the S$950-to-S$1,150 psf ppr range, as anticipated by analysts polled by The Business Times. They had expected the site to attract two to five bids. Property consultants, following the release of the provisional tender results by URA, anticipate that the site will be awarded to the sole bidder. Nicholas Mak, a veteran in the property market, remarked that despite the low land rate of the sole bid, it falls within a reasonable valuation range for the site.
The last time a Government Land Sales (GLS) site for private housing received only one bid was in 2018, for Silat Avenue. The sole bid for the Lentor Gardens tender represents the lowest unit land rate among the five sites in Lentor Hills Estate that have closed since July 2021. It is approximately 11% lower than the winning bid of S$1,108 psf ppr for the Lentor Central plot and nearly 13% below the S$1,130 psf ppr top bid for Lentor Hills Road (Parcel B) in the most recent tender in September 2022.
GuocoLand envisions a high-end residential project with around 533 units and childcare facilities covering 600 square meters (6,458 sq ft) for the Lentor Gardens site. Steven Tan, CEO of OrangeTee & Tie, suggests that the eventual launch price may range from S$1,950 to S$2,050 psf.
Under URA’s tender conditions, the private housing development on the plot will be connected to Lentor MRT station via covered linkways. Notably, established schools such as Presbyterian High School, Anderson Primary School, and CHIJ St. Nicholas Girls’ School are in close proximity to the site.
Following the release of the fifth site in Lentor Hills Estate by URA, two more plots are scheduled for release this month. One is a reserve-list site along Lentor Gardens, adjacent to the plot for which the recent tender closed, while the other is a confirmed-list plot along Lentor Central. These seven sites collectively have the potential to generate approximately 3,500 new private homes, accommodating nearly 11,000 residents based on the average household size in Singapore.
In the Lentor Hills Estate, GuocoLand’s Lentor Modern project, awarded the first site in 2021, has seen 87.3% of its 605 units sold since sales began in September 2022. The median price as of March 19 was S$2,107 psf. Lentor Hills Residences, to be developed on the second site sold, will consist of 598 units and is expected to be launched this quarter. TID Residential also secured Lentor Hills Road Parcel B in September 2022.
According to Lam Chern Woon, Head of Research and Consulting at Edmund Tie, some smaller developers may have refrained from participating in the recent tender due to the presence of established players like GuocoLand and Hong Leong, who have been awarded three out of the four previously launched sites. Lam suggests that the modest bid price by GuocoLand and Hong Leong reflects a cautious approach to maintain market presence while ensuring affordability and profitability for the eventual units.