SINGAPORE, 12 September 2022 – Mr Lam Chern Woon (蓝振文), Head of Research and Consulting at EDMUND TIE comments on 2H 2022 GLS programme.
In spite of a tight landbank supply, developers exhibited restrained bidding activity at three GLS tenders that closed today. The Lentor Central site attracted only three bids, with the top bid of $1,108 psf ppr submitted by a consortium involving Forsea Residence (an entity of China Communications Construction Group), Soilbuild Group and UED Alpha, while the Lentor Hills Road (Parcel B) site attracted only two bids, with the top bid of $1,130 psf ppr submitted by TID Residential, a joint venture between Hong Leong Group and Mitsui Fudosan.
Besides the ongoing economic headwinds and higher interest rates, the limited bidding activity reflected caution over the eventual supply of around 3,000 new housing units projected for the Lentor area, given that the government has been actively releasing land parcels in the vicinity. Although the bids came in slightly below expectations, they reflect continued confidence in the upward trajectory of prices and the expected positive reception to the future Lentor projects given the sites’ positive attributes. Besides being nestled among a private landed residential enclave, the sites also enjoy strong connectivity with the Lentor MRT station and will benefit from the neighbouring amenities and childcare services offered at Lentor Modern’s integrated development. The proximity to the CHIJ St. Nicholas Girls’ School (Primary) will also propel demand among families with young children. The higher top bid for Lentor Hills Road Parcel B is expected, given that the site is within 1km from the popular school, granting priority admission for applicants. Lentor Hills Road Parcel B is also a smaller project (yielding 265 units) compared to Lentor Central (470 units), allowing developers to bid more aggressively for the former site.
The Bukit Batok West Avenue 5 (EC) site attracted 4 bids, with the top bid of $626 psf ppr submitted by CDL. The fairly subdued bid activity reflected caution among developers over the potential supply from no less than four EC sites in the vicinity. The top bid was 5.4% lower than the $662 psf ppr bid for its neighbouring site at Bukit Batok West Ave 8 which was in Mar 2022.
Overall caution among developers was also reflected in the tight price gaps between the top and second bids, especially for the Lentor Central and the Bukit Batok West Ave 8 sites.
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