-- The tender closings for the URA sites at Lentor Central and Champions Way in Woodlands continued the weak sentiment witnessed in recent land tenders. Lentor Central saw only two bids at a top bid price below the previous low in Lentor. The Woodlands site saw better response with 6 bids, but its top bid price of S$904 psf ppr is below expectations. In recent tenders, developers displayed low risk appetites, preferring sites with less than 500 buildable units and hence lower risk of not being able to sell everything within the 5-year ABSD timeframe; as well as sites in the suburbs where demand is less affected by cooling measures, and those with differentiating factors such as proximity to transport nodes, good schools and limited competing supply.
Lentor Central
This is the third Lentor Central site, and the 6th Lentor site to be awarded. The five sites tendered earlier had seen the number of bids dwindle from 9 bids to 3-4 bids and then to one bid for Lentor Garden site in April, and dwindling winning prices from S$1,204 psf ppr to S$985 psf ppr. This site, which is the most northern plot of the 7 plots in Lentor available, saw 2 bids with a top bid, from a JV between Hong Leong Holdings, GuocoLand and CSC Land, of S$435.2 mil or S$982 psf ppr, marginally below the previous low of S$985 psf ppr. This is 5.9% above the second and the only competitor, Frasers Property’s S$410.8 mil or $927 psf ppr. The number of bids is better than the last Lentor Gardens just diagonally across the road, which was tendered in April 2023, received only one bid and was awarded to a GuocoLand and Hong Leong Group JV for S$486.8 mil or S$985 psf ppr.
Response to this site is slightly warmer than Lentor Gardens tender as this site is arguably nearer to Lentor MRT station and amenities at Lentor Modern mixed development, and is slightly smaller at 475 residential units on a maximum GFA of 443,143 sqft, vs 530 units at Lentor Gardens. Nonetheless, there is ample supply in this area with around 3,500 units from 7 plots to be available, with 1,203 units from two projects already launched.
Lentor Hills Residences launched in July 2023 and sold 333 or 56% of 598 units at a median price of S$2,107 psf. Lentor Modern launched in Sep 2022, and has sold 556 or 92% of its 605 units by end-July 2023, at the latest median price of S$2,057 in July 2023.
For this latest plot, despite the lower land price, we expect the developer could still look to launch at $2,100-2,200 psf.
Champions Way
The site drew 6 bids, with a top bid of $294.9 mil or $904 psf ppr from CDL. This is slightly below the 7-9 bids seen for OCR tenders of such scale (350 units) such as the The Botany at Dairy Farm (7 bids) and Altura EC (9 bids) at Bukit Batok West Avenue 8, while the top bid price of S$904 psf ppr is also slightly below expectations. It is 8% above the next highest bid of $835 psf ppr from TID Residential.
Nonetheless, the reception is warmer than that for the recent albeit much larger land sales at the city fringe such as Jalan Tembusu and Marina Gardens Lane which received 2 and 4 bids respectively. Besides its more palatable size, Champions Way site is near to Woodlands South MRT station on the Thomson-East Coast line, as well as to the Singapore Sports School and Singapore American School. There could also be pent-up demand with a dearth of new private home projects in that locality with the latest being Woodhaven and Parc Rosewood that were completed in 2015 and 2014 respectively. On its northeastern side is a cluster of ECs which are newer, with the latest being Bellewoods completed in 2017.
Trading comparables such as Woodhaven and Parc Rosewood trade at median prices of S$1,229-1,301 psf this year-to-date, while the ECs completed between 2016-2017 – Bellewoods, Twin Fountains, Forestville have changed hands in the resale market at $1,112-1,182 psf so far this year.
We forecast at this top bid price of S$904 psf ppr, the developer could launch at S$1,750-1,850 psf.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2022 revenue). The company has approximately 115,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
Release ID: 89108903
Google
RSS