Introduction
The Singapore government is selling three residential land parcels this month. The tenders for these three Government Land Sale (GL8) development sites closed on 13 September 2022. Two of the sites are located at the new housing estate of Lentor and both are zoned for private condominium development, whereas the third site at Bukit Batok West will be developed into an Executive Condominium (EC) project. All three sites are 99-year leasehold properties.
Details of the three residential land parcels
The largest of the three sites is the one at Bukit Batok West Avenue 5, measuring close to 179,000 square feet (sq ft). About 500 EC housing units could be built on this site. The two private residential sites at Lentor Central and Lentor Hills Road (Parcel B) are expected to yield around 470 and 265 non-landed housing units respectively.
The details for the three GL5 sites are included in the table below
Location | Lentor Central | Lentor Hills Road (Parcel B) | Bukit Batok West Ave 5 (EC) |
Site Area | 144,713 sq ft | 116,455 sq ft | 178,936 sq ft |
Land use zoning | Residential (condominium) | Residential (condominium) | Executive Condominium |
Maximum Permissible Gross Floor Area | 434,140 sq ft | 244,556 sq ft | 536,808 sq ft |
Estimated number of dwelling units | 470 | 265 | 495 |
Lease Period | 99 years | 99 years | 99 years |
Lentor Central and lentor Hills Road [Parcel B]
The two condominium land parcels at Lentor are situated within close proximity to each other and located less than 500 meters from lentor MRT Station, which is already operational. This station is part of the Thomson-East Coast Line (TEL). The third stage of the Thomson- East Coast Line (TEL) which consists of 11 stations, including Orchard and Havelock stations, is set to o|oen by end of this year. Therefore, the future residents at lentor can commute seamlessly by MRT to the heart of Singapore’s central region, such as Orchard Road and the Central Business District.
According to URA master blah for Lentor, the residential projects around the Lentor MRT Station will be located within a residential enclave that is connected via pedestrian oaths, a future Hillock Park and the residents will be served by an upcoming commercial mall.
There are three major launched and uncompleted condominium projects that are near the two Lentor sites. The units in all three projects, namely Lattice One, Jadescabe, and AMO Residence are practically fully sold.
Table 2: Comparable projects to Lentor Central and Lentor Hills Road (Parcel B)
Condominium name | Road name | Land tenure | Completion date | Median price ($psf) | % of total units sold |
Lattice One | Seraya Crescent | Freehold | Uncompleted | $1,904 | 100% |
Jadescape | Shunfu Road | 99 years | Uncompleted | $1,846 | 99.7% |
AMO Residence | Ang Mo Kio Rise | 99 years | Uncompleted | $2,110 | 99% |
The Panorama | Ang Mo Kio Avenue 2 | 99 years | 2017 | $1,715 | 100% |
Source: URA, ERA Research & Consultancy
Note." The sales status of the condo in the table is as of end-Aug 2022.
Despite that, there are two private non-landed residential developments located at Lentor, namely Lentor l\/lodern and Lentor Hills Residences, that could be launched in the next 6 months. The 605-unit lentor Modern is scheduled to be launched in mid-September 2022. Both of these condominiums are fairly large, with a total combined yield of about 1,2OO units.
Tender results of the lentor sites
The tender for the sites at l_entor Central and l_entor Hills Road (Parcel B) attracted 3 and 2 bids respectively, which is fewer than expected. However, the land rates for both sites are higher than the land price for the closest comparable site, which is being developed into the condominium, Lentor Hills Residences. The site of lentor Hills Residences was sold in January 2022 to a joint venture consisting of Hong Leong Holdings, TID and GuocoLand at $1,060 psf ppr.
The top bid for the l_entor Central site is $481 million, which translates to $1,1O8 psf ppr, while TID Residential Rte Ltd submits the top bid of $276.36 million or $1,130 psf ppr for the Lentor Hills Road (Parcel B) site. The land rates of both of these sites are above the $l,06O psf ppr paid for the Lentor Hills Residences site, illustrating that the developers expect condominium prices to continue to increase in the near future.
The low number of bids for these two sites does not indicate that property developers are not hungry for land. The supply of private residential units in the suburbs that are yet to be launched is very limited. Hence, many developers need to replenish their land banks. The reason for the low tender participation rate could be that some developers choose not to compete in the lentor area with major developers such as Guocol and Hong Leong Holdings. Guocoland has stakes in two of the upcoming condominium projects, namely lentor Modern and lentor Hills Residences. These two projects have a total of l,200 units. Hence, the developers of these two projects will have a strong competitive advantage in the Lentor residential market.
ln addition, the other developers could have factored in the possibility that the government could sell more land parcels in the lentor area, which would increase the competition for future developments in this location.
EC site at Bukit Batok West Avenue 5
The Executive Condominium (EC) land parcel at Bukit Batok West Avenue 5 is nestled within a cluster of HDB flats and accessible amenities such as a shopping mall, two community centers, and Bukit Batok Hillside Park. In addition, the upcoming Tengah New Town is within 4OO meters from the subject site. The EC parcel is medium-sized with an expected yield of about 495 housing units.
The subject site is located beside another EC development site at Bukit Batok West Avenue 8, which was sold in early March this year to a joint- venture corn rising Qingjian Realty and Santarli Construction. The tender for the land Darcel at Bukit West Avenue 8 drew a total of nine bids and was sold at a record-breaking land price of an EC site to $662 psf ppr.
The nearest comparable EC to the subject site is a fully privatized EC project called The Dew. According to URA’s data, resale units at The Dew were transacted at a median price of $1,020 bsf year-to-date.
Table 4: Cornbarable EC broiects to Bukit E%atok west Avenue 5
Condominium name | Road name | Land tenure | Completion date | Median price ($psf) | % of total units sold |
Ola | Anchorvale Crescent | 99-year | Uncompleted | $1,194 | 100% |
Parc Central Residences | Tampines Street | 99-year | Uncompleted | $1,207 | 100% |
Parc Greenwich | Fernvale Lane | 99-year | Uncompleted | $1,244 | 99.80% |
Provence Residences | Canberra Crescent | 99-year | Uncompleted | $1,251 | 99.30% |
North Gaia | Yishun Close | 99-year | Uncompleted | $1,298 | 26.90% |
The Dew | Bukit Batok Street 21 | 99-year | 2003 | $1,020 | 100% |
Result for EC land tender
The tender for the Bukit Batok West Avenue 5 EC site attracted 4 bids. City Developments Limited submitted the top bid of $336,068,000 or $626 psf ppr.
Currently, North Gala is the only EC project in Singapore with a significant number of unsold units available. In the next l8 months, three other EC projects could be launched for sale to homebuyers, which equates to an average of only one new EC project every six months.
Although the number of un-launched EC projects is limited, the tender results of only four bids show that developers are cautious as the prices of new EC projects are near the top end of the price envelope. lf developers were to launch a new EC project at above $1300 psf, the pace of the sale will be significantly slower as it would face buyers’ resistance.
The spread of the four bids is also very close to one another, as the top bid is only l.5% higher than the lowest bid. This shows that EC developers are facing similar cost structures for the development of EC and the future prices of EC in this location could range within a narrow band.
In addition, the rising construction costs due to inflation and higher cost of labor and materials would put pressure on the developers’ profit margins. Therefore, the new EC projects scheduled to be launched next year could test the $1,300 psf price ceiling.
Table 5: Tender results for Bukit Batok West Avenue 5
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