The tender for Pine Grove (Parcel A) received five bids, but the Government Land Sales (GLS) site at Dunman Road only received two. The highest bid came from SingHaiyi Group at S$1.284 billion, or S$1,350 per square foot per plot ratio (psf ppr), while the runner-up was a joint venture including City Developments Ltd (CDL), Hong Leong Group, and TID, with a bid of S$1.067 billion (S$1,122 psf ppr).
“Today’s tender results indicate that developers are still cautious when acquiring residential land, especially large sites, as evidenced by the small number of participants,” said veteran local property agent Leo Kwek. “This is despite the low inventory of unsold residential units and the recent successful launches of Piccadilly Grand and Liv@MB.”
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The top bid of S$1,350 psf ppr was 20.3% higher than the lower bid of S$1,122 psf ppr, indicating that the lower bidder was very cautious in their competitive offer. Mr. Kwek added, “This tender tells us that there is currently no demand in the market for large plots valued at over a billion dollars, due to the risks associated with capital expenditure and selling over 1,000 units within the five-year deadline to qualify for Additional Buyer’s Stamp Duty (ABSD) remission.”
Leo Kwek noted that the percentage difference between the two bids is the largest in a government residential land sale tender since the GLS tender for Jalan Jurong Kechil, which closed in September 2018. Mr. Kwek added that in the Jalan Jurong Kechil GLS tender, the difference between the highest and second-highest bids was 31.3%.
The Dunman Road site can be developed into a new residential project with a total of 1,040 units.
SingHaiyi’s submitted price of S$1,350 psf ppr is 4% higher than the S$1,302 psf ppr that City Developments paid for a GLS site at Jalan Tembusu in District 15 in January this year. The Jalan Tembusu site, which can accommodate about 640 residential units, received eight bids at the close of its tender.
There are two large-scale development projects underway in District 15: the GLS site at Jalan Tembusu and the freehold Thiam Siew Avenue site. The Thiam Siew Avenue site was purchased via an en bloc sale last November by a joint venture between Hoi Hup Realty and Sunway Developments and could be developed into a new 820-unit condominium project.
Leo Kwek stated that despite the site’s attractive location, the low number of bids reflects the “large scale and intense competition” from the new projects at Jalan Tembusu and Thiam Siew Avenue.
Mr. Kwek predicts that the new private residential development on Dunman Road will launch at a price of around S$2,200 to S$2,300 per square foot.
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