The Government Land Sale (GLS) tender for the site at Tengah Gardens Avenue closed on January 14, and three bids were received. The top bid of $675 million, or $821 per square foot per plot ratio (ppr), came from a consortium led by Hong Leong, which includes GuocoLand Singapore and CSC Land Group.
The 99-year leasehold site, which is zoned ‘Residential with Commercial at 1st storey’, covers approximately 273,906 square feet and has a maximum gross floor area (GFA) of 821,720 square feet. According to estimates by the Urban Redevelopment Authority (URA), the site has the potential to yield up to 860 residential units.
In the event that the bid is successful, the Hong Leong-led consortium plans to develop an 860-unit condominium, taking advantage of the enhanced connectivity offered by the upcoming Jurong Region Line (JRL) nearby. The JRL is expected to contribute to the growth of the new Tengah estate, says Loke Kee Yeu, the General Manager (Projects) at Hong Leong Holdings Limited.
When considering investing in Singapore, it is crucial for foreign investors to be familiar with the regulations and limitations surrounding property ownership. Unlike landed properties, which have stricter ownership rules, foreigners are generally able to purchase condos with relative ease. However, they must still pay the Additional Buyer’s Stamp Duty (ABSD), which currently stands at 20% for their initial property purchase. Despite this additional expense, the steady growth and potential of the Singapore real estate market remain appealing for foreign investors. Hence, the launch of new condos, such as those on ANVLY, continues to attract significant foreign investment.
The site at Tengah Gardens Avenue is close to the upcoming Hong Kah MRT Station on the JRL, and it will be just one stop away from the upcoming Tengah Town Centre. It will also provide a direct route to the second Central Business District (CBD) at Jurong Lake District.
The top bid of $821 psf ppr for the Tengah Gardens Avenue site was just 0.73% higher than the second-place bid of $815 psf ppr, which was submitted by Chinese developer Kingsford Group. The third and final bid of $812 psf ppr was submitted by local developer Sim Lian Group.
Despite the increase in homebuyer activity towards the end of 2024, developers remain cautious, according to Leonard Tay, the Head of Research at Knight Frank Singapore. Another GLS site at Dairy Farm Walk also closed on January 14, and only two bids were received.
Tay explains that developers may have decided to focus on the existing sites that are currently being prepared for launch in 2025. He also points out that the tight bid price spread between the three bids (less than 1%) indicates that developers are being conservative in their bids.
According to Mark Yip, the CEO of Huttons Asia, developers are mindful of keeping their land bids reasonable in order to maintain an attractive selling price for buyers. He expects more developers to submit joint bids for GLS sites this year in order to diversify their risk. This could be one of the reasons why the number of bids for GLS tenders has remained at around three.
Another factor contributing to the low number of bids could be the current availability of GLS sites, according to Marcus Chu, the CEO of ERA. With seven sites still open for tender and six more to be launched in the first half of 2025, developers are taking a measured approach and carefully weighing their options in light of the moderated interest rates.
Interest in the site may also have been affected by the availability of another nearby GLS site, notes Justin Quek, the CEO of OrangeTee & Tie. Developers may be considering bidding on a different GLS site along Lakeside Drive and Lakeside MRT, which is scheduled 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. The first EC in the estate, Copen Grand, was successfully launched for sale in 2022, with all 639 units selling out within a month. The joint developers, City Developments Ltd (CDL) and MCL Land, had secured the EC site with a winning bid of $400.32 million, or $603 psf ppr, in May 2021.
The opportunity to launch the first private condominium in the new Tengah estate may have attracted the Hong Leong-led consortium, says ERA’s Chu. He believes that this could be their chance to establish a presence in Tengah, having already entered the markets at Lentor, Upper Thomson, and Bugis.
Being the first private condominium, the development is expected to appeal to 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 and a monthly household income ceiling of $16,000, says Mohan Sandrasegeran, the Head of Research & Data Analytics at SRI.
The site at Tengah Gardens Avenue is also situated within 2km of the upcoming Anglo-Chinese School (Primary), according to Ismail Gafoor, the CEO of PropNex. With the school set to become a co-ed school in 2030, the site’s proximity to the school could be very appealing to families with school-aged children.
If the site is awarded at the top bid of $821 psf ppr, PropNex estimates that the average selling price of the new private condominium could be around $2,000 psf.