Two plots for private homes snag billion-dollar top bids from developers

SINGAPORE - Two large 99-year-leasehold state land parcels offered for private housing - in Marina Gardens Lane and Tampines Avenue 11 - each snagged a top bid that breached the billion-dollar mark on Tuesday.

The site at Marina Gardens Lane attracted a bid of $1.034 billion and that at Tampines Avenue 11 fetched $1.206 billion.

But given their hefty price quantum and higher development risks, these two private-home plots attracted fewer bids, as developers turned cautious amid higher interest rates and construction costs, a murkier economic outlook and several rounds of cooling measures.

A third plot – a 495-unit executive condo site in Plantation Close in Tengah – saw massive interest amid low EC stock and the site’s proximity to the popular Anglo-Chinese (Primary) School, which will be relocated to Tengah in 2030.

The three sites were offered in the Government Land Sales (GLS) programme’s second-half 2022 confirmed list.

Developers have lower risk appetites

and are leaning towards projects that require less outlay and with lower exposure to foreigners, Ms Tricia Song, CBRE’s head of research for South-east Asia, said.

A consortium comprising Chinese developer Kingsford Huray Development and two others was the top bidder for the Marina Gardens Lane site – the first to kickstart development of the 45ha Marina South precinct.

Offering sea views and facing Gardens by the Bay, the site can yield 790 residential units and up to 8,073 sq ft of commercial space, and is near the future Marina South MRT station.

The $1.034 billion bid by Kingsford, together with consortium partners Obsidian Development and Polarix Cultural & Science Park Investment, trumped the second-highest bid of $727.04 million from GuocoLand (Singapore) by about 42 per cent and a third bid of $703.33 million. A fourth bid from Japura Development, affiliated to Hong Kong’s Cheung Kong group, came in at $148 million.

The top bid for the mega mixed-use site in Tampines Avenue 11 was secured by a 50:50 joint venture between a UOL-SingLand consortium and CapitaLand Development. The top bid of $1.206 billion is about 14 per cent above the second-highest bid of $1.058 billion, and 32.7 per cent higher than a third bid of $909.09 million.

Pointing to the 42 per cent bid spread for Marina Gardens Lane, Mr Lam Chern Woon, head of research and consulting at Edmund Tie, said that “is practically unheard of in Singapore’s GLS tender history”.

“It reflects caution after ABSD rates were doubled (to 60 per cent) for foreigners. Developers may be concerned over the limited amenities and schools in the vicinity that could meet the needs of households,” he said, referring to the additional buyer’s stamp duty (ABSD).

Although Kingsford will have a first-mover advantage in the Marina South precinct, the area is undeveloped and the high development cost could have made other contenders cautious, said Ms Chia Siew Chuin, JLL’s head of residential research, research and consultancy.

Huttons senior director of research Lee Sze Teck noted that the wide bid spread “reflects difficulties in determining fair value for a prime city-fringe site in a relatively untested area”.

Knight Frank Singapore’s research head, Mr Leonard Tay, said: “Will there be enough locals willing to fork out a premium to live in close proximity to the Downtown Core and Gardens by the Bay? Or will there be enough foreigners willing to pay the increased ABSD for a view of Marina Bay?”

PropNex Realty head of research and content Wong Siew Ying said developers are also “mindful of the supply of homes in the CBD/Downtown area, including upcoming projects in Marina View, Newport Residences and Skywaters Residences”.

At a land rate of $1,401.52 psf ppr, the developer would need to launch the project at $2,680 to $2,800 psf, Mr Nicholas Mak, chief research officer of Mogul.sg, said.

Meanwhile, the future integrated development with a bus interchange and other amenities at the Tampines Avenue 11 megasite (1,190 units) will inject much-needed new supply in the suburbs and help meet demand from upgraders in Tampines, Bedok and Pasir Ris, analysts say.

The last private non-EC residential project launch in Tampines was the mega 2,203-unit Treasure at Tampines in March 2019, which was fully sold in February 2022, JLL noted.

Huttons’ Mr Lee noted that another integrated transport hub project, The Reserve Residences in Bukit Timah, sold more than 70 per cent on its launch weekend.

The joint-venture partners for the Tampines Avenue 11 site plan to “leverage their expertise” to develop a mixed-use project that could cater to demand in Tampines North, spokesmen for UOL and CapitaLand Development said.

The third plot, a 495-unit EC site in Plantation Close in Tengah, drew submissions from nine tenderers, of which two submitted an alternative proposal. This plot was launched for sale via a modified concept and price revenue tender approach. The qualifying bids will be disclosed at a later date.

The number of bids for this site is higher than the four for the nearby Bukit Batok West Avenue 5 EC site in September 2022, Ms Chia noted.

Mr Lam said there was overwhelming interest in the Plantation Close EC site, despite significant competition from two unlaunched EC projects at Bukit Batok West Avenue 8 and Avenue 5 and the neighbouring Plantation Close parcel in the second-half 2023 GLS confirmed list.

This could be because the site is close to the future Tengah Park MRT station and Copen Grand, the first EC in Tengah, which was fully sold after a month of its launch.

“The proximity of the future Anglo-Chinese (Primary) School could have played a huge role in the developers’ underwriting too,” Mr Lam said.

Mr Eugene Lim, key executive officer at ERA Realty Network, said: “Developers are very hungry for EC sites. According to URA data, only 747 new EC units are available... Copen Grand’s success has proven to developers there is strong demand for ECs in Tengah.”