SINGAPORE, 27 June 2023 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on the tender closing of 3 GLS sites (Marina Gardens Lane, Tampines Avenue 11 and Plantation Close).
Tenders closed for three GLS sites today. The cautious responses to the sites at Marina Gardens Lane and Tampines Avenue 11 demonstrate that the recent cooling measures have shrunk the risk appetite of developers.
Marina Gardens Lane
The Marina Gardens Lane site saw four bids and the top bid was submitted by a consortium consisting of Kingsford Huray Development Pte. Ltd., Obsidian Development Pte. Ltd. and Polarix Cultural & Science Park Investment Private Limited at a bid price of S$1.03 billion or S$1,402 psf ppr, 42% higher than the next highest bid. A 42% price premium is practically unheard of in Singapore’s GLS tender history and the caution that prevailed among the other developers is likely due to the potential impact on foreign demand after ABSD rates were doubled for foreigners. Developers might also be concerned that there are limited amenities and schools in the vicinity that could meet the needs of households.
Tampines Avenue 11
The mixed-use mega site at Tampines Avenue 11 drew only 3 bids, in part due to the fact that it is a considerable sizeable project that can potentially yield 1,190 residential units and 14,000 sq m of commercial space. Although developers would understandably refrain from an aggressive bid given the project size, the top bid by Topaz Residential and Commercial (an entity related to UOL) of S$1.21 billion or S$885 psf ppr is even lower (by 4.9%) than the top bid for the Tanah Merah Kechil Link site awarded in end-2020 when market confidence was still weak during the pandemic. Nonetheless, we are sanguine about end-user demand for this site, as there is potential strong upgrading demand from residents (post-MOP) in the neighbouring public housing which was completed a few years ago. Situated near the upcoming Tampines North MRT, this integrated development offers a wide range of convenient amenities for residents, including hawker centres, bus interchange and a community club.
Plantation Close EC
While interest was subdued for the private residential sites, there was an overwhelming interest for the Plantation Close EC site, despite the significant potential competition from the two unlaunched EC projects at Bukit Batok West Ave 8 and Ave 5 and the neighbouring Plantation Close parcel in the 2H 2023 GLS Confirmed List. The EC site saw nine bids and the strong interest could be due to its proximity to the future Tengah Park MRT station on the Jurong Regional Line, enhancing connectivity for residents to commercial nodes nearby in Jurong Lake District, Jurong Innovation District and Tuas Port. In addition, the success of Copen Grand, the first EC in Tengah, which achieved an impressive sales rate of about 73% on its launch day and was fully sold after a month of launch, has further instilled confidence in developers in bidding for this site. The proximity of the popular Anglo-Chinese (Primary) School, which will be relocated to Tengah in 2030 is located within 2km radius of the parcel and could have played a huge role in the developers’ underwriting too, going by the high value placed on education.
ENDS
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