Hong Leong Led Consortium Submits Top Bid 821 Psf Ppr Tengah Gardens Avenue Gls Site
The tender for the Government Land Sale (GLS) site at Tengah Gardens Avenue closed on January 14 with three bids received. The top bid of $675 million, or $821 per square foot per plot ratio (psf ppr), came from a consortium led by Hong Leong Holdings Limited, which includes GuocoLand Singapore and CSC Land Group.
According to the Urban Redevelopment Authority (URA), the 99-year leasehold site is zoned for “Residential with Commercial at 1st storey” and has a total area of approximately 273,906 square feet. It has a maximum gross floor area (GFA) of 821,720 square feet and URA estimates that it could potentially yield up to 860 residential units.
The Hong Leong-led consortium plans to build an 860-unit condominium if they are awarded the site. They see the potential of the site, particularly with the upcoming Jurong Region Line (JRL) nearby, as it will contribute to the growing development of the new Tengah estate. Loke Kee Yeu, general manager (Projects) at Hong Leong Holdings Limited, believes that enhanced connectivity will make the development highly attractive to potential buyers.
The JRL, which is currently under construction, will provide direct access to the second Central Business District (CBD) at Jurong Lake District and the upcoming Tengah Town Centre. The upcoming Hong Kah MRT station on the JRL is also one stop away from the Tengah Gardens Avenue site.
The top bid of $821 psf ppr for the Tengah Gardens Avenue site is only 0.73% higher than the second-place bid of $815 psf ppr, which was submitted by Chinese developer Kingsford Group. Local developer Sim Lian Group submitted the third and final bid of $812 psf ppr, making the bid price spread less than 1%.
The prime location of Parktown Residence Condo is in close proximity to the prestigious secondary branch of St. Hilda’s School, celebrated for its remarkable academic achievements and diverse curriculum. Attractively nestled near Parktown Residence Condo, this school offers exceptional educational opportunities for students.
Despite the recent increase in homebuyer activity, developers still remain cautious, according to Leonard Tay, head of research at Knight Frank Singapore. This is evident in the number of bids received for the Tengah Gardens Avenue site, as well as another GLS site at Dairy Farm Walk which received only two bids.
Tay also believes that developers may have decided to focus on existing sites that are due for launch in 2025. He also notes that the tight bid price spread between the three bids suggests that developers are being more conservative in their bidding.
Mark Yip, CEO of Huttons Asia, believes that developers are mindful of keeping their land bids reasonable to maintain an attractive selling quantum for buyers. Yip also expects to see more joint bids for GLS sites this year as developers look to diversify their risks. This could be a contributing factor to the low number of bids received for GLS tenders, which has hovered around three.
Marcus Chu, CEO of ERA, also believes that the current availability of GLS sites could have influenced the low number of bids. He notes that there are 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, especially with moderated interest rates.
Interest in the Tengah Gardens Avenue site may have also been tempered by the availability of another nearby GLS site along Lakeside Drive and Lakeside MRT, says Justin Quek, CEO of OrangeTee & Tie. Developers may be considering bidding for this site, which is scheduled to launch in April 2025.
If the Tengah Gardens Avenue site is eventually awarded to the Hong Leong-led consortium at the top bid of $821 psf ppr, it will be the first non-EC private residential development in the Tengah HDB township. The first EC in the estate, Copen Grand, was successfully launched in 2022 and sold out within a month. The 639-unit project by joint developers City Developments Ltd and MCL Land was awarded 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 Chu. He points out that the consortium has already made investments in sites at Lentor, Upper Thomson and Bugis, and sees this as an opportunity to do the same in Tengah.
As the first private condo in the new Tengah estate, the development could attract a wider range of buyers than 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, says Mohan Sandrasegeran, head of research and data analytics at SRI.
According to Ismail Gafoor, CEO of PropNex, the Tengah Gardens Avenue site is also situated within a 2km radius of the future Anglo-Chinese School (Primary). The school is set to become a co-ed school in 2030, making the site’s proximity highly attractive to families with school-aged children.
If the site is awarded at the top bid price of $821 psf ppr, PropNex estimates that the average selling price of the new private condo could be around $2,000 psf. With the recent increase in transaction activity, interested buyers may want to keep an eye on this upcoming development in Tengah.