URA releases two more residential GLS sites in Lentor
A view towards Lentor MRT station and surrounding GLS sites. The Lentor precinct is shaping up as a private residential enclave with more amenities, but the risks to developers are also perceived to be higher with at least three projects to be launched within the next two years. (Picture: Samuel Isaac Chua/The Edge Singapore)
SINGAPORE (EDGEPROP) - URA has released two more residential sites in Lentor under the 2H2022 Government Land Sales (GLS) programme.
The site at Lentor Gardens is under the Confirmed List and has been launched for sale. The other GLs site at Lentor Central is under the Reserve List and is only available for application. If developed, the Lentor Gardens site could yield about 530 residential units while the Lentor Central site could house around 475 units.
Several GLS sites in the vicinity have been snapped up by developers in recent months. The most recent was the sites at Lentor Central and Lentor Hills Road (Parcel B), which were awarded in September.
The Lentor Central GLS site was awarded to a consortium comprising China Communications Construction, Soilbuild Group Holdings and United Engineers, a unit of Yanlord Land. The consortium submitted the top bid of $1,108 psf per plot ratio (ppr).
Meanwhile, the winning bid for the Lentor Hills Road (Parcel B) was $1,130 psf ppr by TID, a joint venture between Hong Leong Group and Mitsui Fudosan, which emerged as the top bidder.
In comparison, both of those sites awarded in September attained higher land prices than an earlier site at Lentor Hills Road (Parcel A), which was awarded to a consortium made up of Hong Leong Holdings, GuocoLand and TID in January. The top bid was $1,060 psf ppr. The 184,393 sq ft site will be developed into Lentor Hills Residences, a 600-unit residential development.
The first new launch of the area was Lentor Modern by GuocoLand and is the only integrated development currently planned for the area. The launch of Lentor Modern in September was highly successful as the developer sold 512 units, or close to 85% of the 605-unit project, at a median price of $2,108 psf during its initial sales launch over the Sept 17 and 18 weekend.
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“While the Lentor precinct is shaping up as a private residential enclave with an increase in amenities, the risks (to developers) are also perceived to be higher with at least three projects to be launched within the next two years,” says Lee Sze Teck, senior director, research, at Huttons Asia.
So far, given the number of GLS sites awarded and released, the expected pipeline of supply for the entire area is close to 2,500 units. Lee says that the government could potentially push out more sites in the Lentor area over the next few years.
According to Steven Tan, CEO of OrangeTee & Tie, despite the strong sales launch of Lentor Modern, the latest property cooling measures implemented on Sept 30 have added new headwinds for the local residential property market.
“Under the latest round of cooling measures, the interest rate floor used to calculate the total debt servicing ratio will be increased to 4% from the previous 3.5%. The change will reduce the loans available to new home buyers. The reduced affordability may affect the price of future launches in this area,” says Tan.
He expects between two and five bidders for the Lentor Gardens site with developers adopting a more conservative land bid attitude, coming in between $1,050 and $1,150 psf ppr.
Huttons’ Lee shares the same pricing expectation and number of expected bids. He adds: “It is highly unlikely that the Reserve site at Lentor Central will be triggered. There is a possibility that the government will move Lentor Central to the Confirmed List of 1H2023 GLS programme. That is another risk developers have to factor in their bids for Lentor Gardens.”
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