GuocoLand-Hong Leong JV Sole Bidders as Singapore Site Draws $367M Record Low Offer

A joint venture between Malaysia’s GuocoLand and its Singapore cousins at Hong Leong Holdings placed the sole bid in a government tender for a residential plot in the northern part of Singapore’s Ang Mo Kio area, with the low-ball S$486.8 million ($367.2 million) offer seen as a sign that developers are becoming more cautious.

The Urban Redevelopment Authority (URA)’s tender for a 235,370 square foot (21,867 square metre) plot in Lentor Gardens, part of the emerging Lentor neighbourhood, closed on Tuesday with the GuocoLand-Hong Leong offer of S$985 per square foot of gross floor space marking the lowest rate by unit of area offered by top bidders in a government land sale within the past year.

“The modest bid price by GuocoLand and Hong Leong reflects a cautious approach to maintain their market presence, while ensuring that they can price the eventual units in an affordable, yet profitable manner,” said Chern Woon Lam, head of research and consulting at property consultancy Edmund Tie. “Amid the challenging business climate, the outcome of this tender could set the tone for the other tenders ahead and cautious bidding is likely to be the name of the game.”

Lam said developers are likely to have factored in upcoming supply when considering bids in this latest tender, as the five Lentor Hills plots that have been auctioned off since July 2021, along with another state tender in the neighbourhood opening this month will yield around 3,000 new homes.

More Lentor Projects For the Group

In the tender Singapore’s Kwek family, who control the privately-held Hong Leong Holdings and its SGX-listed City Developments Ltd (CDL) subsidiary, have teamed up once again with their cousins from Malaysia’s Quek family who control GuocoLand, to reach for a third project in the Lentor area.

Should the URA award the Lentor Gardens site to GuocoLand and Hong Leong’s Intrepid Investments unit, the joint venture would win the right to develop up to 494,290 square feet of gross floor area across an estimated 533 new homes. Under the terms of the tender, the developers must also build a childcare facility of at least 6,458 square feet on the site.

The 99-year leasehold plot is located near the Lentor MRT station in the Lentor Hills Estate, which is bordered by Lentor Estate to the north, Teachers’ Housing Estate to the south and the Sindo Industrial Estate to the west.

“The future development will complement our other two upcoming developments – Lentor Modern and Lentor Hills Residences – in our plans to transform the Lentor Hills estate to be widely known as a premium residential area,” the two companies said in a joint statement Tuesday evening.

Their joint bid is the lowest offer in terms of price per unit area for any of the the five residential conducted as government land sales in the Lentor neighbourhood to date, and is about 7 percent less than the second lowest price of S$1,060 per square foot per plot ratio submitted by a consortium led by the same GuocoLand-Hong Leong JV in January 2022. That site is now under construction as the joint venture’s Lentor Hills Residences project.

Edmund Tie’s Lam said the Lentor Gardens bid was the lowest since Sim Lian Group’s S$980 per square foot purchase of the Dairy Farm Walk site in Upper Bukit Timah in March 2022.

“It remains to be seen whether URA will award the site if it is below their reserve price,” said Leonard Tay, research head of Knight Frank Singapore.

If awarded, Tay estimated the selling price of units in the upcoming could start from S$2,000 per square foot, similar to GuocoLand’s nearby Lentor Modern residences, where buyers have already snapped up 88 percent of the project’s 605 units since its September launch.

GuocoLand is building the 25-storey condo on a Lentor Central site it won for S$784 million via a state land tender in July 2021.

Lentor Central Hitting Market Soon

Tay believes homebuyers will be drawn to Lentor Gardens given its accessibility to the downtown core via the Thomson-East Coast Line, as well as its proximity to schools and recreational facilities such as Thomson Nature Park, Yio Chu Kang Stadium and Sports Complex, and CHIJ St Nicholas Girls’ School.

“The Lentor Gardens plot has unblocked views of landed homes and low-rise housing, and high-floor units will have views of nature reserves and reservoirs,” GuocoLand and Hong Leong said in their statement. “Besides enjoying close proximity to various park spaces and nature reserves, residents of the proposed development will have the future Hillock Park right at their doorstep as the site is abutting the park.”

However Edmund Tie’s Lam cautioned that macroeconomic headwinds, high borrowing costs and a tight lending policy may temper demand in the area.

Adding to the upcoming supply in the neighbourhood is another tender for a 158,262 square foot plot in Lentor Central, scheduled to start later this month.

While awaiting URA’s decision on their Lentor Gardens bid, GuocoLand and Hong Leong Holdings, together with Japan’s Mitsui Fudosan, are busy preparing for the launch of their 598-unit Lentor Hills Residences luxury condo later this month, a year after the consortium won the land plot with a S$768 million bid.