SINGAPORE - The results of the first two state tenders that closed on Tuesday after new cooling measures were introduced indicated that developers are still land hungry but more cautious.

Eight bidders had vied for a 99-year leasehold residential site at Jalan Tembusu near the East Coast, and their keen interest helped set a new high in land rates for a residential government land sales (GLS) site in the city fringe area, PropNex said.

But developers were mostly cautious on another leasehold residential site at Lentor Hills Road (Parcel A) near Yio Chu Kang, which drew just four bids.

A unit of City Developments (CDL) came out tops with a bid of $768 million or $1,302 per sq ft per plot ratio (psf ppr) for the Jalan Tembusu site.

This topped the previous record land rate in the city fringe area at $1,129 psf ppr for a site at Northumberland Road, which was awarded in May 2021, PropNex Realty head of research and content Wong Siew Ying said.

Mr Sherman Kwek, CDL group chief executive, said that the Jalan Tembusu GLS site could bolster CDL's development inventory by over 600 units.

"While there will be some headwinds on the back of the property cooling measures, we believe that the market remains well-supported by an improving job market and strong household balance sheets," he said.

CDL said that if it wins the award, a residential project comprising four blocks of 20 to 21 storeys with a total of about 640 residential units, could be built. The project will enjoy sea views and unobstructed views of the CBD skyline and the Singapore Sports Hub.

Ms Wong noted that CDL's bid is about 8 per cent higher than the second highest bid at $712.6 million.

But the $768 million bid is 67 per cent higher than the eighth bid at $460 million ($780 psf ppr), "probably indicating that some developers moderated their bids to reflect potential risks from the new cooling measures", she said.

Mr Nicholas Mak, head of research and consultancy at ERA, attributed the keen interest to the perception that the future project "may not face much competition when it is launched."

The future Jalan Tembusu development could potentially be launched at between $2,100 psf and $2,300 psf, analysts say.

Meanwhile, the Lentor Hills Road (Parcel A) site attracted a top bid of $586.6 million or $1,060 psf ppr from a consortium comprising GuocoLand (Singapore), Intrepid Investments and TID Residential.

This bid is 5.2 per cent lower than the Ang Mo Kio Avenue 1 GLS site, which was awarded at a land rate of $1,118 psf ppr in June 2021. It is also below that of the nearby Lentor Central site, which was awarded at $1,204 psf ppr.

Ms Wong noted: "Interestingly, GuocoLand was awarded the Lentor Central site in July 2021. It appears that the developer seems keen to own a sizeable stake in developing the Lentor estate, a move that could be seen as defending the price it paid for the Lentor Central plot earlier."

PropNex said that the average selling price of the future project could be between $1,750 psf and $1,850 psf.

The tender results showed that developers are being more selective after the latest round of cooling measures were rolled out on Dec 16 last year.

"There is likely to be keener interest in more attractive sites and a willingness to bid more competitively, whereas less attractive sites will receive a measured response," said Mr Ong Teck Hui, senior director of research and consultancy at JLL.

Huttons Asia senior director of research Lee Sze Teck said he believes that potential supply near both residential sites helped moderate bids.

"Just a short walk away from Jalan Tembusu is the Thiam Siew Avenue en-bloc site which can potentially yield 800 units. There will be another site along Dunman Road which will be up for tender in March 2022.

"At Lentor, there are two neighbouring sites in the first half 2022 confirmed list and one site under the reserve list," he added.

Sites on the confirmed list are launched for sale according to schedule, regardless of demand; while those on the reserve list are launched only upon successful application by a developer or when there is sufficient market interest.

The Jalan Tembusu site is located near the Tanjong Katong MRT station, while the Lentor Hills site is near the Lentor MRT station.