Hong Leong Led Consortium Submits Top Bid 821 Psf Ppr Tengah Gardens Avenue Gls Site
The tender for the Government Land Sale (GLS) plot at Tengah Gardens Avenue closed on Jan 14 with a total of three bids. Taking the top spot was a consortium led by Hong Leong, along with GuocoLand Singapore and CSC Land Group, with a bid of $675 million, translating to $821 per square foot per plot ratio (psf ppr).
The 99-year leasehold site is designated for “Residential with Commercial at 1st storey” and spans approximately 273,906 square feet with a maximum gross floor area (GFA) of 821,720 square feet. The site has an estimated potential of accommodating up to 860 residential units.
If awarded, the Hong Leong-led consortium plans to develop an 860-unit condominium, capitalizing on the improved connectivity from the upcoming Jurong Region Line (JRL) nearby. The JRL is expected to contribute to the development of the new Tengah estate, says Loke Kee Yeu, general manager (Projects) at Hong Leong Holdings Limited.
Located near the upcoming Hong Kah MRT Station on the JRL, the Tengah Gardens Avenue site is just one stop away from the upcoming Tengah Town Centre and offers a direct route to the second CBD at Jurong Lake District.
The top bid of $821 psf ppr for the Tengah Gardens Avenue site is marginally higher than the second-place bid of $815 psf ppr, submitted by Chinese developer Kingsford Group. Local developer Sim Lian Group submitted the third and final bid of $812 psf ppr.
Although there has been an uptick in homebuyer activity towards the end of 2024, developers remain cautious, according to Leonard Tay, head of research at Knight Frank Singapore. Another GLS site at Dairy Farm Walk also closed on Jan 14, receiving only two bids.
“Developers may have decided to focus on the existing sites that are currently in the works for launch in 2025,” says Tay. He also points out that the tight bid price spread between the three bids (less than 1%) indicates that developers are more conservative in their bidding strategies.
Mark Yip, CEO of Huttons Asia, suggests that developers are keen on keeping land bids reasonable to retain an appealing selling quantum for buyers. He expects to see more joint bids from property developers for GLS sites this year as a means to diversify risk. This could be one reason why the number of bids for GLS tenders has consistently hovered around three.
According to Marcus Chu, CEO of ERA, the current availability of GLS sites could also be a contributing factor to the low number of bids. “With seven sites still open for tender and six more to launch in the first half of 2025, developers are taking a measured approach, carefully considering their options with the current moderate interest rates.”
Interest in the Tengah Gardens Avenue site could have been tempered by the availability of another nearby GLS site, notes Justin Quek, CEO of OrangeTee & Tie. Developers could be considering placing a bid for a different GLS site along Lakeside Drive and Lakeside MRT, which is set to launch for tender in April 2025.
If awarded, the Tengah Gardens Avenue site will be the first private residential site (excluding Executive Condominiums) in the Tengah HDB township.
In 2022, the 639-unit Copen Grand, the estate’s first EC, was successfully launched for sale. It sold out within a month of its launch by joint developers, City Developments Ltd (CDL) and MCL Land. In May 2021, the joint developers secured the EC site with a winning bid of $400.32 million, or $603 psf ppr.
The opportunity to launch the first private condominium in the new Tengah estate may have been a key factor in attracting the Hong Leong-led consortium, says ERA’s Chu. “Having previously ventured into sites at Lentor, Upper Thomson and Bugis, they see this as an opportunity to do the same in Tengah.”
Being the first private condo, the development could potentially attract a wider range of buyers compared to ECs, which are subject to HDB eligibility criteria and restrictions such as a five-year minimum occupation period (MOP) and a monthly household income ceiling of $16,000, adds Mohan Sandrasegeran, head of research & data analytics at SRI.
The Tengah Gardens Avenue site is situated within 2km of the future Anglo-Chinese School (Primary), according to Ismail Gafoor, CEO of PropNex. With the school set to become a co-ed institution in 2030, the site’s proximity to the school could be very desirable for families with school-aged children.
If awarded at the top bid of $821 psf ppr, PropNex estimates that the average selling price of the new private condo could be around $2,000 psf.
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Overall, the recent Government Land Sales Tender for the Tengah Gardens Avenue site saw a marginally higher bid of less than 1%, reflecting the cautious sentiment among developers. The availability of other GLS sites and the current moderate interest rates could also have contributed to the lower number of bids. However, if awarded, the site could potentially be home to a highly sought-after residential development in the new Tengah estate.