A pair of Singapore residential sites attracted competitive bidding from developers late last week as the city-state’s housing market continues to benefit from investor confidence, as shown by rising home prices and recovering sales volumes in Southeast Asia’s most expensive city.
Singapore-listed GuocoLand offered to pay more than S$784 million ($576 million) for a private condo project near the upcoming Lentor Central MRT station on the Thomson-East Coast Line, giving it the highest bid for the 60,480 square metre (651,001 square foot) project near Nanyang Polytechnic in the northern part of the city.
On the same day that the results of the Lentor Central tender were announced by Singapore’s Urban Redevelopment Authority, the city’s Housing Development Board revealed that a consortium composed of a Qingjian Realty and Octava Pte Ltd joint venture working together with private developer Santarli Realty had placed a record high bid of S$422 million for an Executive Condominium site in the Tampines area of northeastern Singapore.
“They (the bids) are bullish but not completely out of expectations given the locational attributes of the sites, especially for the Lentor Central site,” said Lam Chern Woon, head of research and consulting for local property agency Edmund Tie. He added that, “In spite of the pandemic, the property market has achieved steady sales with pricing on an uptrend after a brief dip.”
Just one day after the tender results were announced, the URA’s statistics on Singapore’s property market for April through June showed a fifth straight quarter of rising prices as private home sales jumped 73 percent over last year’s COVID-driven lows.
GuocoLand Adds to Pipeline
To win its 185,139 square foot site in the Lentor Hills Estate in Singapore’s Ang Mo Kio Planning Area, GuocoLand, which is part of Malaysian tycoon Quek Leng Chan’s Hong Leong Group, will still need to win approval for its design proposal under Singapore’s two-envelope land sale system.
Once the 99-year leasehold property is in hand, the project will include no more than 8,000 square metres of commercial space on the first floor, with a supermarket and early childhood development centre required to be part of the mix. The site is estimated to yield 605 housing units.
At the compensation offered, GuocoLand will be paying the equivalent of S$1,204.47 per square foot of built space after outbidding the second-ranked offer from units of the Hong Leong Group, which is helmed by Quek Leng Chan’s Singaporean cousin Kwek Leng Beng.
Units in the Lentor Central Project are expected to sell for around $2,000 per square foot, which would set a new benchmark for the up and coming area, according to Edmund Tie’s Lam.
“The high bid price and tight winning margin reflects a recognition of the pent-up demand arising from the lack of launches in this area for over a decade,” Lam said. “Connectivity is excellent with the site being integrated to the upcoming Lentor MRT Station on the Thomson East Coast Line.”
New High in Tampines
In Tampines, a residential area west of Changi International Airport, Qingjian, Octava and Santarli set the highest bid ever on a price per square foot basis for an Executive Condominium project, a hybrid type of housing which integrates luxury amenities into government subsidised projects.
At the consideration offered, the top bidders would be paying the equivalent of $658.93 per square foot of housing for the 23,799 square metre site. Once completed, the project is set to yield up to 59,498 square metres of space by gross floor area.
“This is likely a record land rate for an EC site under the government land sales programme,” said Christine Sun, vice president of research and analytics at property consultancy OrangeTee. Sun noted that the bid smashed the previous high price of $603 per square foot of built area in an Executive Condominium project set by Taurus Properties in June of this year.
Sun estimates that the 590 units expected to be built in the 99-year leasehold project can be expected to sell for between S$1,250 and S$1,300 per square foot.
Singapore Market on the Rise
The enthusiastic bids for the pair of sites come as the URA’s latest figures indicate growing strength in Singapore’s residential market with the city continuing to recover from the pandemic.
Private housing prices in the second quarter were up 7.1 percent compared to the same period in 2020, and grew 0.8 percent over the average in the first three months of this year.
With pandemic restrictions limiting buyer access to showrooms, developers introduced 37 percent fewer homes on the market during the period from April through June, compared to the first quarter, with sales dropping off 15 percent on a quarter by quarter basis.
As developers held back, private sellers benefitted with the 5,333 resales of private homes in the from April through June marking the highest since the third quarter of 2009. With many occupants of Housing Development Board (HDB) homes expected to take advantage of cheap credit to buy private homes, Wong Xian Yang, head of research for Singapore at Cushman & Wakefield is optimistic about future home sales.
“Buying demand is expected to remain healthy in the upcoming quarters, supported by the projected economic recovery and improvement in the labour market, as well as the surge in HDB upgraders,” Wong said.