Two land parcels within the new Lentor Hills estate were auctioned off by Singapore’s Urban Redevelopment Authority on Tuesday, with a consortium led by Chinese-owned United Engineers winning the larger of the two residential development sites with a bid of S$481 million ($345 million).
The unit of Shanghai-based developer Yanlord Land, along with partners Soilbuild Group Holdings and UED Alpha, overcame two other bids by Tanglin Land and a team led by GuocoLand to earn the right to develop Lentor Central, a 13,444.3 square metre (144,713 square foot) 99-year leasehold site near the new Lentor MRT Station, into 470 residential units.
Meanwhile, the 10,819 square metre Lentor Hills Road (Parcel B), on the other side of the future Hillock Park, was awarded to TID Residential for S$276.4 million, with the joint venture of Singapore-based Hong Leong Group and Japan’s Mitsui Fudosan topping a sole remaining bid by the same United Engineers consortium. Hong Leong, controlled by magnate Kwek Leng Beng, is the controlling shareholder in SGX-listed builder City Developments Ltd.
“The tender for the Lentor Central site closed with three bids, below expectations, despite its closer proximity to the Lentor MRT station in comparison to the other GLS site in the Lentor area that closed today,” said Leonard Tay, head of research for Knight Frank Singapore.
Builders Turning Cautious
Tay noted the contrast between the winning S$481 million bid for Lentor Central, representing S$1,108 per square foot of potential gross floor area, and the S$784 million bid that the previous Lentor Modern site received from GuocoLand in July 2021, reflecting S$1,204 per square foot of GFA despite its larger size.
The United Engineers consortium’s bid for Lentor Central was 3.7 percent higher than the second-place bid of S$464 million placed by Tanglin Land. For the smaller Lentor Hills Road (Parcel B), a 99-year leasehold site that can yield about 265 homes, TID Residential’s winning tender topped the consortium’s S$232.3 million bid by almost 19 percent.
“Despite the site’s relatively more manageable project size, it failed to appeal to developers who have likely taken note of the ample pipeline of new supply within the Lentor Hills estate,” said Wong Siew Ying, head of research and content at PropNex Realty.
That pipeline includes future housing on the Lentor Modern site and at Lentor Hills Road (Parcel A), a plot that City Developments Ltd’s sister firm Hong Leong Holdings, together with GuocoLand and TID Residential, won for S$586.59 million in January of this year. Another 21,866.7 square metre site at the estate, Lentor Gardens, is open for applications.
“The tender results — fewer bidders and relatively tight bid prices — suggest that developers may have turned more cautious,” Wong said. “We think this may be due to various considerations, including rising interest rates — which will impact borrowing cost to finance land acquisitions — rising inflation, as well as global uncertainties and the potential risk of the government introducing further cooling measures.”
CDL Wins in Bukit Batok West
Also on Tuesday, City Developments Ltd placed the highest bid of S$336 million (S$626 per square foot of GFA) for a 99-year leasehold executive condominium site at Bukit Batok West Avenue 5 in District 23.
Out of four total bids, CDL topped the second-highest tender by a razor-thin margin of 0.2 percent (or S$1 per square foot), the company said in a statement released Tuesday evening.
“We are very pleased to emerge as the top bidder for this tightly contested EC site in Bukit Batok West, especially at such a narrow margin of victory,” said CDL group CEO Sherman Kwek. “Given the site’s proximity to the upcoming Tengah New Town and Jurong Lake District, it will benefit from easy access to a wide range of amenities as well as good connectivity to such a key business, lifestyle and tourism hub. We look forward to transforming this expansive site into a sustainably designed and well-built residential landmark.”
Located between three MTR stations, the 178,936 square foot site is at the junction of Bukit Batok West Avenue 5 and Bukit Batok Road opposite the upcoming Tengah New Town, which will have amenities such as a community club, a polyclinic and an integrated bus interchange, CDL said. The planned EC project will comprise 10 blocks of 12 to 13 storeys with 510 homes and a basement carpark.
“This is the second site released for EC development in the same area within this year,” said Catherine He, director and head of research for Singapore at Colliers. “Together with the Tengah Garden Walk site awarded in June 2021, all three sites would offer around 1,500 EC units in the area. Developers may be wary of the high potential supply in the area and hence temper their bids.”
Note: This story has been updated to clarify that TID Residential is a joint venture between Singapore’s Hong Leong Group and Mitsui Fudosan. An earlier version had identified Malaysia’s Hong Leong Group as a partner in the joint venture. Mingtiandi regrets the error.