First private housing plot in Tengah launched under GLS; Dairy Farm Walk site also up for sale

SINGAPORE – Two leasehold private residential sites in Dairy Farm Walk and Tengah Garden Avenue were released for sale via tender on June 13 under the first-half 2024 Government Land Sales (GLS) programme.

Both parcels are on the confirmed list, while a third plot in Bayshore Road on the reserve list has been made available for application.

Confirmed list sites are launched according to schedule regardless of demand, while sites on the reserve list are put up for tender only when a developer makes an offer acceptable to the Government.

The 25,456 sq m residential with commercial at first storey site in Tengah Garden Avenue – the first private residential site to be launched for tender in Tengah – can yield 860 units and 3,000 sq m of commercial space. The 21,881.8 sq m plot in Dairy Farm Walk is expected to yield 540 private residential homes. Both tenders will close on Jan 14, 2025.

As with recent land tenders, analysts expect the two confirmed list sites to see measured participation due to their large land size.

Land bids for these sites will likely be lower than previously sold sites in their vicinity, said Mr Lee Sze Teck, senior director of data analytics at property firm Huttons Asia.

He cited rising land supply and ongoing challenges including high construction costs, financing costs and new guidelines on the harmonisation of strata and gross floor areas – where units are sold based on liveable space – which may result in a loss of saleable area for developers.

But PropNex head of research and content Wong Siew Ying expects the Tengah Garden Avenue site to interest developers seeking a first-mover advantage in building the first private residential project in Tengah.

Also boosting the site’s appeal is its proximity to the future Hong Kah MRT station on

the upcoming Jurong Region Line,

as well as

the Anglo-Chinese School (Primary), which will move to Tengah in 2030,

she added.

Robust sales at the nearby Copen Grand executive condominium (EC), which sold 73 per cent of its 639 units at its launch in October 2022, also bode well for private housing demand in the area.

But due to its large size, this site could attract two or three bids, with the top bid coming in at between $740 million and $806 million, or a land rate of $900 to $980 per square foot per plot ratio (psf ppr), Ms Wong said.

ERA chief executive Marcus Chu noted that despite the development of new transport infrastructure in Singapore’s western region, Tengah remains a relatively unfamiliar locale for home buyers.

But Mr Justin Quek, chief executive of OrangeTee & Tie, believes that a limited supply of private homes in this area may fuel demand, in particular, from buyers “who do not qualify for ECs, but still want to live in Tengah, and exceed the EC income ceiling of $16,000”.

The most recent private plot sold in the vicinity was in Hillview Rise – now being developed as Hillhaven – which was awarded at a land rate of $1,024 psf ppr in November 2022, said Mr Quek. He expects the Tengah plot to garner up to four bids, with the highest bid between $850 psf ppr and $950 psf ppr. 

Analysts say the Dairy Farm Walk site, which can yield 540 units, may not be as exciting, given unsold supply from recent new launches nearby, and because it is not near an MRT station.

Mr Quek says that it is potentially the biggest new development in the Dairy Farm area in recent years, and believes there may be moderate developer interest for this site, given limited new home supply in the area.

The last GLS site awarded in the locale was also in Dairy Farm Walk, where The Botany at Dairy Farm is being built. This site attracted seven bids and was awarded in March 2022 at $347 million ($980 psf ppr). As at June 2, The Botany at Dairy Farm has sold 90 per cent of its 386 units at an average unit price of more than $2,050 psf, Ms Wong said.

Mr Chu said that people downgrading from private landed properties surrounding this site and HDB upgraders from nearby estates in Bukit Panjang and Choa Chu Kang may be interested in the future project.

Analysts are split on whether the Bayshore plot, which can offer 515 new private homes, will be triggered for sale soon.

PropNex’s Ms Wong does not expect the site to be triggered soon, in view of the slew of upcoming new launches and ample supply from the first-half 2024 GLS programme.

If developers do not apply for it, the site may be moved to the confirmed list in the second-half 2024 GLS slate, she said.

But other analysts believe the site’s attractive features, including sea views of the East Coast Park beach and proximity to the upcoming Bayshore MRT station, coupled with pent-up demand in the area, could result in the site being triggered for sale.

Mr Chu noted that the last GLS site awarded in the Bayshore area – now Seaside Residences – was in January 2016 at $858 psf ppr.

“Developers and buyers would want to capitalise on getting first-mover advantage, being the first site sold in the new Bayshore estate,” he said.