The recent Government Land Sales (GLS) exercise, which closed on 14 January 2024, saw modest interest in two sites at Tengah Garden Avenue and Dairy Farm Walk, with just three and two bids received, respectively. Bidding came in at the lower end of expectations, sustaining the ongoing trend of subdued bid amounts and low competition for GLS land parcels.
The first private housing site in the upcoming Tengah estate received three bids, with a Hong Leong-led group submitting the highest offer at $675 million, or $821 per square foot per plot ratio (psf ppr).
At Dairy Farm Walk, a parcel slated for 540 units attracted two bids, with a Santarli Construction-led consortium taking the top spot with a bid of $504.5 million ($1,020 psf ppr), surpassing Sim Lian Group’s offer by a notable 23%.
While the private real estate market showed signs of recovery with November 2024 recording decade-high private residential sales, developers remain cautious. The lukewarm response to these sites reflects continued prudence amid economic uncertainties.
In this article, we’ll dive into the details of the bids for these two GLS sites and offer insights into their development potential if the highest bids are accepted.
Tengah Gardens Avenue GLS Site: A Cautious Approach from Developers
The highest bid for the Tengah Gardens Avenue GLS site was submitted by a Hong Leong-led consortium, which includes GuocoLand Singapore and CSC Land Group, at $675 million or $821 psf ppr.
This top bid narrowly edged out the second-place bid of $815 psf ppr by just 0.73%, submitted by Chinese developer Kingsford Group. Sim Lian Group, a local developer, came in third and final bid of $812 psf ppr.
The modest number of bids—just three—may reflect developers’ strategic focus on other upcoming GLS sites this year, which could potentially offer better returns. Additionally, the tight price spread of less than 1% between bids suggests a conservative bidding strategy, reflecting continued cautious market sentiment.
Interest in the Tengah Gardens Avenue site may also have been affected by the availability of another GLS site in close proximity. Developers could be eyeing the upcoming Lakeside Drive site near Lakeside MRT, which is scheduled to launch for tender in April 2025. The potential of this alternative site may have diverted attention and resources, as it could present a more attractive opportunity for developers.
Industry experts predict that future GLS exercises may see more joint ventures among developers. Such collaborations allow them to share risks amidst ongoing uncertainty about demand for future new launches.
A Mixed-Use Development with Strong Potential at Tengah Gardens Avenue
If the Hong Leong-led consortium’s top bid is accepted, a mixed-use development featuring up to 860 residential units and commercial space on the ground floor could take shape at Tengah Gardens Avenue. Benefiting from its proximity to the upcoming Jurong Region Line (JRL), the site will be just one stop away from the future Tengah Town Centre and offer a direct connection to Jurong Lake District, Singapore’s second Central Business District (CBD).
This project will also mark a milestone as the first fully private residential development (excluding Executive Condominiums) in the Tengah township. The strong reception of the area’s first EC, Copen Grand—a 639-unit project that sold out within a month—demonstrates the growing demand for housing in this emerging township.
Unlike ECs, private condominiums have no restrictions on HDB eligibility criteria, monthly household income ceilings, or minimum occupation periods. This wider appeal, combined with the development’s strategic location near the upcoming second CBD, is likely to attract significant interest from buyers.
Dairy Farm Walk GLS Site: A Bold Top Bid and Market Trends
For the Dairy Farm Walk GLS site, a consortium led by Santarli Realty and Apex Asia Development submitted the highest bid of $504.52 million, translating to a land rate of approximately $1,020 psf ppr. The second bid, from Sim Lian Group’s business units (Sim Lian Land and Sim Lian Development), was $410 million, or $829 psf ppr. The top bid stands out as bullish, being 23.1% higher than Sim Lian’s offer.
This site marks the fourth GLS plot released by the government in the Dairy Farm area, following successful tenders in 2018 and 2022. In 2018, United Engineers acquired a nearby site on Dairy Farm Road, now the fully sold 460-unit Dairy Farm Residences. In March 2022, Sim Lian Group won the bid for another site on Dairy Farm Walk with an offer of $347 million ($980 psf ppr), outpacing six competitors. This site is being developed into The Botany at Dairy Farm, a 386-unit project that launched in March 2023 and is approximately 99% sold, with an average price of $2,026 PSF.
Compared to the stronger competition seen in the earlier GLS tenders in the area, the latest GLS exercise, which closed on 14 January 2024, saw significantly reduced developer interest, underscoring a shift in market dynamics.
Outlook for the Dairy Farm Walk Site: Cautious Optimism Amid Uncertainty
Currently, details about the potential development on the Dairy Farm Walk site remain scarce, making it difficult to estimate the number of units to be offered. However, if the top bid is accepted, industry experts anticipate a launch price of approximately $2,250 psf.
The strong reception of the area’s previous GLS projects—Dairy Farm Residences and The Botany at Dairy Farm—suggests there may still be interest from discerning buyers attracted to the prestigious Bukit Timah neighbourhood. However, local real estate observers note the muted response from developers in this latest GLS exercise, citing concerns about the site’s potential.
This cautious sentiment may stem from worries that the pent-up demand in Hillview and Dairy Farm has already been absorbed by the earlier two launches. Despite this, the neighbourhood’s appeal could still drive interest, potentially leading to a healthy take-up rate for the future development.
In Summary
The latest GLS exercise for Tengah Gardens Avenue and Dairy Farm Walk reflects a cautious sentiment among developers, driven by economic uncertainties and concerns about market demand. However, both sites hold significant potential. Tengah Gardens Avenue offers the promise of a landmark mixed-use development, leveraging its proximity to the upcoming Jurong Region Line and Tengah Town Centre. Meanwhile, Dairy Farm Walk’s location in the sought-after Bukit Timah neighbourhood could still attract discerning buyers despite muted developer interest. As these developments unfold, they may offer valuable insights into the evolving dynamics of Singapore’s real estate market.
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