Singapore’s Urban Redevelopment Authority (URA) has launched a tender for a sixth residential plot in an emerging estate in Ang Mo Kio, with the government confirming the upcoming sale of its latest Lentor Central site just one day before finalising a tender for a neighbouring project at a record low price.
With the upcoming tender set to add around 475 new condos to the estate known as Lentor Hills, after the previous sale attracted just one bid (from a joint venture between Malaysia’s GuocoLand and its Singapore cousins at Hong Leong Holdings), analysts are expecting a similarly restrained response from developers.
“Given the high interest rates and the ample pipeline of upcoming project launches in the Lentor area, we believe developers will be cautious with their bid prices – keeping within the range of land rates of the previous GLS sites to ensure that the future project is competitive compared to the neighbouring new offerings,” said Siew Ying Wong, research and content head at property agency PropNex Realty.
The Lentor Central site was officially launched on Wednesday, with the URA confirming on Thursday that it had accepted a bid equivalent to S$985 per square foot of gross floor area in the Lentor Gardens tender which closed just over one week ago.
The Lentor Central site spans 158,262 square feet (14,703 square metres) between the future Hillock and Linear parks, and is the sixth plot the URA has launched in the area around the Lentor MRT station since July 2021. The tender is set to close on 12 September.
The 99-year leasehold will entitle the winning bidder to build up to 443,140 square feet of gross floor area, including at least 5,382 square feet for childcare facilities.
Propnex’ Wong expects the project to draw no more than two bids at values ranging between S$434.3 million to S$456.4 million, or from S$980 to S$1,030 per square foot of GFA.
If the winning bid comes in at the lower end of that price range it would rank as the cheapest yet among the six plots tendered in the Lentor Hills Estate.
Located within a short walk of Lentor MRT station, the plot was included in Singapore’s government land sale programme for the first half of 2022 when that was announced in December and is located directly beside a site won by a joint venture of Yanlord Land’s United Engineers unit and Soilbuild Group last September for S$481 million.
The URA also included a second plot at Lentor Gardens in its reserve list for the land sale programme in the first half of this year, however, the launch of that project would be contingent on adequate developer demand.
With that additional Lentor Gardens site potentially adding another 500 units to the housing pipeline in the area, Wong says the chance of that project being launched in the coming weeks is “relatively low” given the nearly 3,000 new condos being added to the area through the first six sites.
Set for Launch in Late 2024
With GuocoLand and Hong Leong having secured their Lentor Gardens site at the lowest price so far in the area, the partners now plan to build a 530-unit high-end residential complex on the plot, combining mid-rise eight-storey blocks and 16-floor towers with sky terraces.
With sales slated for launch in the second half of 2024, Dora Chng, GuocoLand’s general manager for residential, expects demand for the project to remain strong given its connectivity, amenities and the green spaces available in the neighbourhood.
“We have a strong track record in creating high-end residential projects with innovative concepts. We have also demonstrated our capabilities in transforming and uplifting neighbourhoods through our developments,” Cheng Hsing Yao, chief executive officer of GuocoLand Group said in a statement on Thursday. “For the Lentor estate, we and our partners will position this new neighbourhood into a new premium residential estate with our various projects in the area.”
The successful tender gives GuocoLand its third project in the Lentor Hills Estate, after Lentor Modern which it launched for sale in September last year as a solo development and Lentor Hills Residences, which GuocoLand is also developing together with Hong Leong Holdings and its TID Residential joint venture with Japan’s Mitsui Fudosan.
The Quek family of GuocoLand and the Kwek clan of Hong Leong are cousins, perhaps underlining Lentor Hills family nature.
Mass Market Slows
The Lentor Hills projects add to a surge of home supply entering the Singapore market in the near term.
PropNex estimates that some 11,500 new homes, excluding executive condos, will be launched for sale this year, with about 1,500 units of that total having already hit the market. This year’s new supply is more than double the 4,528 condos launched onto the market last year, according to URA data, and exceeds the 2021 total of 10,496 new homes by more than 9 percent.
Following last year’s dip in supply, new project launches in Singapore have continued to set fresh pricing benchmarks around the city, despite the upswing in new homes entering the market and the future pipeline.
Preliminary data from the URA for the first quarter shows prices for private non-landed homes rose 2.5 percent from the previous three months and were up 11.2 percent compared to the same period last year.
While price-sensitive homebuyers are becoming more cautious with their purchases as borrowing costs rise, Knight Frank said demand for premium condos should remain strong, driven by luxury homebuyers who are less dependent on debt financing.
“Prices in the prime segment would likely grow while price growth in the mass market may begin to taper off with the exception of new launches, resulting in a possible two-tier market emerging in the coming months,” said Nicholas Keong, head of the property agency’s private office division.