The tenders for three state-owned plots closed on Tuesday, with fewer developers submitting bids due to higher interest rates and increased economic and geopolitical uncertainties. Nevertheless, two private housing sites, specifically Lorong 1 Toa Payoh and Pine Grove Parcel B, received top bids that exceeded market expectations.
- The Lorong 1 Toa Payoh and Pine Grove Parcel B sites attracted just three bids each.
- A site at Clementi Avenue 1 was more popular, with six bidders, largely because it is the smallest of the three plots, resulting in a lower land cost outlay.
According to Mr. Leonard Tay, Head of Research at Knight Frank Singapore, while participation rates were lower compared to some Government Land Sales (GLS) tenders in 2022, developers placed bullish bids to secure the top position.
- The top bid for the Clementi Avenue 1 site came from a partnership between CSC Land Group and a unit of MCL Land, amounting to $633.4 million, with a land rate of $1,250 per square foot per plot ratio (psf ppr).
- The top bid for the Lorong 1 Toa Payoh site was presented by a joint venture between CDL, Frasers Property, and Sekisui House, amounting to $968 million, equating to a land rate of $1,360 psf ppr.
- The top bid for the Pine Grove Parcel B site was submitted by an entity linked to MCL Land, at $692.4 million, with a land rate of $1,223 psf ppr.
The bids and bid rates varied significantly among the three sites, reflecting the differing market outlooks among developers in the face of heightened economic and geopolitical uncertainties. Developers continue to favor sites that are less affected by cooling measures and are close to transport nodes, good schools, and have limited competing supply.
Market analysts suggest that future mass-market condos on these sites could be priced approximately 10% to 15% higher than those launched in 2023.