Developers more cautious in bidding for GLS sites

The tenders for three government land sale (GLS) site tenders closed on Sept 4. This was the first batched closing of GLS sites after the latest round of property cooling measures were announced on July 5. Two of the sites were from URA’s Government Land Sales Programme, namely the Dairy Farm Road residential site with commercial use on the first storey; the non-landed residential site on Jalan Jurong Kechil; and the executive condo (EC) site at Canberra Link in Sembawang.
Bidding activity was “subdued” as indicated by the number of bidders and their bid prices, notes Desmond Sim, CBRE executive director of research for Singapore and Southeast Asia.
The cautious bidding by developers was most noticeable for the private housing sites, with five bids received for the Dairy Farm Road GLS site and three bids for the Jalan Jurong Kechil site, compared with nine bids for the Canberra Link EC site, says Tay Huey Ying, JLL head of research & consultancy, Singapore. She sees this as indicative of developers’ sentiment that demand for private homes will be more adversely affected than that for ECs.
TENDER RESULTS
Dairy Farm Road
Jalan Jurong Kechil
Canberra Link
Use
Residential with Commercial uses at 1st storey
Residential
Executive Condominium (EC)
Land Area (sqm)
19,647.7
14,234.9
18,040.6
GFA (sqm)
41,261.0
19,929.0
45,101.5
Est. No. of Units
500
280
450
Top Bid Price(S)
368.8 million
215.0 million
271.0 million
Top Bid Price ($ psf ppr)
830
1,002
558
No. of Bidders
5
3
9
Source: JLL Research
Dairy Farm Road site
The highest bid of $368.8 million came from United Engineers’ wholly-owned subsidiary UEDR Residential. The bid price translates to a land rate of $830 psf ppr, which is 22.2% lower than the $1,068 psf ppr paid by Hong Leong Group for the Hillview Rise GLS site in June, points out JLL’s Tay.
Based on the land rate for the Dairy Farm site, Tay estimates the selling price for the new project to be in the range of $1,400 to $1,500 psf. The projected selling price for the Dairy Farm Road site is in line with the average transacted price of $1,437 psf recorded for the May 2018 launch of the second phase of Le Quest at Bukit Batok Street 41, according to JLL.