A tender for a 99-year leasehold residential government land sale (GLS) site at Lentor Gardens closed today with just one bid from GuocoLand and Intrepid Investments (a subsidiary of Hong Leong Group). In submitting a bid of $486.8 million, the joint venture partners translated to a land rate of $985 psf per plot ratio (psf ppr). This was the lowest bid for a land parcel in the Lentor precinct, and the first time a residential GLS tender had seen only one bid since Silat Avenue GLS site in 2018.
The last two residential GLS sites to be sold in Lentor were at Lentor Central and Lentor Hill (Parcel B). Lentor Central was awarded to a consortium led by China Communications Construction, Soilbuild Group Holdings and United Engineers for $481.03 million ($1,108 psf ppr). TID (a joint venture between Hong Leong Group and Mitsui Fudosan) won the top bid for Lentor Hills (Parcel B), at $276.36 million ($1,130 psf ppr). Both sites will yield around 470 and 265 units respectively.
Prior to this, in January 2022 the GLS site at Lentor Hills Road (Parcel A) was sold for $586.6 million ($1,060 psf ppr). This could yield approximately 598 units, and will be developed into Lentor Hills Residences by GuocoLand, Hong Leong Holdings, and TID (a joint venture between Hong Leong Holdings and Mitsui Fudosan).
GuocoLand also launched the 605-unit Lentor Modern integrated development last September, of which 84% of the units were sold on launch weekend. The average price was $2,104 psf, and the development is now 88% sold. The site was acquired for $784.1 million ($1,204 psf ppr) in July 2021.
Huttons Asia CEO Mark Yip noted that developer bids had been declining since the first GLS site in Lentor was released. He suggested that this was due to economic uncertainty and additional taxes that could be imposed if all units are not sold within five years.
Two more GLS sites in Lentor will be available for sale under the 1H2023 GLS Programme; one estimated to yield 475 units and is expected to launch a tender this month, while the other with 500 units is on the Reserved List.
Leonard Tay, head of research at Knight Frank Singapore, commented that all seven residential sites in Lentor have the potential of bringing 3,500 new units to the area, which could account for around 11,000 new residents.
However, the Lentor Gardens site – which closed today – is near Lentor MRT station, Thomson Nature Park, Yio Chu Kang Stadium and Sports Complex, and CHIJ St Nicholas Girls’ School. Homebuyers may be drawn by the convenience of public transport and the access to recreational and educational facilities.
Finally, OrangeTee & Tie CEO Steven Tan believes the eventual launch at the site could see units priced around $1,950 to $2,050 psf.
The highest bid at the Lentor Gardens site comes as yet another indication that developers are re-evaluating their strategies in light of current economic uncertainty. With the site’s convenient transportation, unique recreational amenities, and access to prestigious educational institutions, however, it could prove a lucrative investment in the long run.