The tender for the Tengah Gardens Avenue site under the Government Land Sale program closed on January 14th with three bids received. The top bid of $675 million was submitted by a consortium led by Hong Leong, which includes GuocoLand Singapore and CSC Land Group. This bid represents a price of $821 per square foot per plot ratio (psf ppr).
The 99-year leasehold site is zoned for residential development with commercial space on the first storey. It spans approximately 273,906 square feet and has a maximum gross floor area of 821,720 square feet. The Urban Redevelopment Authority estimates that the site has the potential to yield up to 860 residential units.
Should the Hong Leong-led consortium be awarded the site, they plan to develop an 860-unit condominium, taking advantage of the enhanced connectivity provided by the upcoming Jurong Region Line (JRL) nearby. According to Loke Kee Yeu, General Manager (Projects) at Hong Leong Holdings Limited, the JRL will contribute to the growth of the new Tengah estate.
The Tengah Gardens Avenue site is located near the upcoming Hong Kah MRT Station on the JRL. It will be just one stop away 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. The third and final bid of $812 psf ppr was submitted by local developer Sim Lian Group.
Despite the increase in homebuyer activity towards the end of 2024, developers remain cautious, according to Leonard Tay, Head of Research at Knight Frank Singapore. Another GLS site at Dairy Farm Walk also closed on January 14th and received only two bids.
Tay suggests that developers may have decided to focus on existing sites that are being prepared for launch in 2025. He also points out that the tight bid price spread between the three bids (less than 1%) indicates that developers are being conservative in their bids.
Mark Yip, CEO of Huttons Asia, believes that developers are keeping their land bids reasonable in order to maintain attractive selling prices for buyers. He expects more developers to submit joint bids for GLS sites this year as a way to diversify risk. This may be one reason why the number of bids for GLS tenders has remained around three.
According to Marcus Chu, CEO of ERA, another factor contributing to the low number of bids could be the current availability of GLS sites. With seven sites still open for tender and six more expected to be launched in the first half of 2025, developers are taking a measured approach and weighing their options amid moderate interest rates.
Interest in the Tengah Gardens Avenue site may 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 be launched for tender in April 2025.
If awarded, the Tengah Gardens Avenue site will be home to the first private residential development (excluding Executive Condominiums) in the Tengah HDB township. The first EC in the estate, Copen Grand, was successfully launched for sale in 2022 and sold out within a month. The joint developers, City Development Limited (CDL) and MCL Land, secured the EC site with a top bid of $400.32 million, or $603 psf ppr, in May 2021.
ERA’s Chu believes that the opportunity to launch the first private condominium in the new Tengah estate may have attracted the Hong Leong-led consortium. “Having made forays into sites at Lentor, Upper Thomson, and Bugis, they see this as an opportunity to do the same in Tengah.”
According to Mohan Sandrasegeran, Head of Research & Data Analytics at SRI, being the first private condominium in the area could attract a wider range of buyers compared to Executive Condominiums, which are subject to HDB eligibility criteria and restrictions such as a five-year minimum occupation period (MOP) and a monthly household income ceiling of $16,000.
PropNex estimates that the average selling price of the new private condominium at the Tengah Gardens Avenue site could be around $2,000 psf if awarded at the top bid of $821 psf ppr. The site’s location within 2km of the future Anglo-Chinese School (Primary), according to Ismail Gafoor, CEO of PropNex, could be very appealing to families with school-aged children.