Tengah Gardens Avenue GLS site draws top bid of $675 million
The tender for the Government Land Sale (GLS) site at Tengah Gardens Avenue closed on January 14 with three bids. A consortium led by Hong Leong, which includes GuocoLand Singapore and CSC Land Group, submitted the top bid of $675 million, or $821 per square foot per plot ratio (psf ppr).
The 99-year leasehold site is zoned for “Residential with Commercial at 1st storey” and covers approximately 273,906 square feet, with a maximum gross floor area (GFA) of 821,720 square feet. The Urban Redevelopment Authority (URA) estimates that the site could potentially yield up to 860 residential units.
If awarded, the Hong Leong-led consortium plans to build an 860-unit condo, taking advantage of the enhanced connectivity provided by the upcoming Jurong Region Line (JRL) nearby. According to Loke Kee Yeu, the general manager (Projects) at Hong Leong Holdings Limited, the JRL will contribute to the growth of the new Tengah estate.
The Tengah Gardens Avenue site is located near the upcoming Hong Kah MRT Station on the JRL, which is just one stop away from the upcoming Tengah Town Centre. It also offers a direct route to the second Central Business District at Jurong Lake District.
The top bid of $821 psf ppr for the Tengah Gardens Avenue site was only 0.73% 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.
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Despite the increase in homebuyer activity towards the end of 2024, developers are still 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, with only two bids received.
Tay believes that developers may be concentrating on 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 with their bids.
Mark Yip, the CEO of Huttons Asia, believes that developers are trying to keep their land bids reasonable in order to maintain an attractive selling price for buyers.
Yip predicts that more property developers will submit joint bids for GLS sites this year in order to diversify risk. This could be one reason why the number of bids for GLS tenders has remained 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 weighing their options amid moderated interest rates.
Interest in the site may have also been tempered 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 be launched for tender in April 2025.
If awarded, the Tengah Gardens Avenue site will be home to the first private residential site (excluding Executive Condominiums) in the Tengah HDB township.
The estate’s first Executive Condominium, Copen Grand, was successfully launched for sale in 2022. The 639-unit project sold out within a month of its launch by joint developers City Developments Ltd (CDL) and MCL Land. The developers secured the Executive Condominium site with a winning bid of $400.32 million, or $603 psf ppr, in May 2021.
The opportunity to launch the first private condo in the new Tengah estate may have attracted the Hong Leong-led consortium, says ERA’s Chu. “Having made successful bids for sites at Lentor, Upper Thomson and Bugis, they see this as another opportunity in Tengah.”
As the first private condo, the development could attract a wider range of buyers compared to Executive Condominiums, 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, says Mohan Sandrasegeran, the head of research & data analytics at SRI.
The Tengah Gardens Avenue site is located within 2km of the future 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 attractive 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 condo could be around $2,000 psf.