SINGAPORE - Records were smashed when bids were lodged yesterday for two residential sites under the Government Land Sales (GLS) programme.
Tenders for both 99-year leasehold plots - a Tampines executive condominium (EC) parcel and one in Lentor Central - closed last night with nine bids lodged for each, as developers rushed to replenish land banks as unsold private housing inventory nears a four-year low of 16,929 units.
They were both on the confirmed list sites under the first-half 2021 GLS programme. This means they were launched according to schedule regardless of demand. Together, they can yield about 1,195 residential units.
The top bid for the EC plot in Tampines Street 62 was lodged by a joint venture between Qingjian Realty and Santarli Construction at $422 million, or $659 per sq ft per plot ratio (psf ppr).
Their bid was just 1.4 per cent above the second-placed one of $416.3 million.
The $422 million bid is the highest land rate to be paid for an EC site in the history of this type of housing, said Mr Nicholas Mak, head of research and consultancy at ERA Singapore.
It broke the previous record land rate of $603 psf ppr for an EC site in Tengah Garden Walk, the last GLS EC land tender that closed just before this tender, he added.
Analysts noted that six of the nine bids for the Tampines plot, which is expected to yield 590 units, were above the $603 psf ppr land rate for the Tengah Garden Walk site.
"The developer would have to launch the future Tampines EC project at above $1,250 psf. The current median transacted prices for new EC units in the second quarter this year is $1,154 psf," Mr Mak said.
Mr Ong Teck Hui, senior director of research and consultancy at JLL, said a strong selling point is the site's proximity to the upcoming Tampines North MRT station and amenities in Tampines town.
Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said prices for new ECs are inching closer to $1,200 psf this year.
"Piermont Grand was sold at a median price of $1,151 psf, and Parc Central Residences at $1,173 psf. Therefore, a median selling price of above $1,200 psf for new ECs could be breached when (the Tampines) plot is launched," she said.
Meanwhile, a GuocoLand unit was the top bidder for the Lentor Central site, with an offer of $784.1 million - 4.5 per cent higher than the second-highest bid of $750 million.
The plot, tendered by the Urban Redevelopment Authority, is earmarked for a private residential development with commercial space on the first floor. It could yield about 605 units.
The $784.1 million bid for the site, which is next to the upcoming Lentor MRT station on the Thomson-East Coast Line, translates to a land rate of $1,204 psf ppr.
"This bid is 7.7 per cent higher than the winning bid of $1,118 psf ppr for the Ang Mo Kio Avenue 1 GLS tender that closed in May this year," noted PropNex chief executive Ismail Gafoor.
"The potential selling price for the future Lentor Central development could range from $1,950 psf to $2,000 psf."
Ms Tricia Song, head of research for South-east Asia at CBRE, said: "The commercial component will provide retail options and amenities for the residential areas around the Lentor and Yio Chu Kang area, as well as future developments from two Lentor Hills sites in the second-half 2021 GLS programme."
Mr Gafoor said both sites will provide more mass-market private homes in the suburbs or outside central region (OCR), which tend to appeal to owner-occupiers and Housing Board upgraders.
The bids reflect developers' confidence in the suburban market, which has been showing signs of pent-up demand amid diminishing supply and a lack of new launches in the suburbs, he added.