Developers show caution in land auctions housing sites
Lentor Close should have an average price between S$1,950/sqft and S$2,200/sqft.
Hong Leong spokesman, said: If awarded, “we plan to build a privately owned residential development with approximately 475 units in 2 high-rise blocks. Residents would benefit from the nearby amenities including Lentor’s MRT station. The site will be more appealing to buyers.”
China Communications Construction Company, Soilbuild Group, Yanlord Land Group purchased a Lentor Central parcel in September 2022 at S$1,108/sqft/ppr. TID Residential acquired the Lentor Hills Road(Parcel B) site for S$1,130/sf/ppr.
GuocoLand’s Lentor Modern of 605 units was the first new development to be built in the estate. During its launch weekend, 84 per cent sold at prices from S$1,856 up to S$2,538psf. URA data shows that only 8.1 per cent, or 49 unsold apartments, remain at the end of July 2023.
GuocoLand has acquired the site from GuocoLand for S$784.1 millions or S$1,204 PSF ppr, in July 2020.
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Lentor Hills Residences – a mixed-use integrated project – saw a softer response in July. It was a result of a wave if cooling measures. Hong Leong GuocoLand TID Project sold more than half of its units at its launch, with an average price per square foot of S$2,080.
City Developments Limited (CDL) placed the highest bid for the Woodlands site. It came out 8.3 percent higher than TID Residential’s second highest bid at S$272.3million or S$835psfppr, a joint-venture between Hong Leong Holdings (HHL) and Mitsui Fudosan.
CDL’s chief executive Sherman Kwek released a statement following the announcement. He said that “after a series successful launches in Singapore we are seeing a decrease in our inventories of launched projects.” This site replenishes our landbank to ensure a constant launch pipeline.
CDL plans on building four 11 story blocks with a total of around 350 homes. There will also be a basement parking area and a centre for early childhood development.
Hong Leong Holdings was the winner of the Lentor Central tender, with a bid of S$435.2m, or S$982psfppr. This bid came from a joint-venture between GuocoLand (South Pacific Development Co.) and China Construction.
This bid was well within expectations. It was also a touch lower than GuocoLand’s S$985 per sq ft ppr that they had offered to the Lentor Hills Estate as the sole tenderer in April. On a psf-basis, it was then the lowest of the five sites in Lentor Hills Estate to be sold since the end of July 2021.
After several waves and sharply rising financing costs, developers’ bids for the two 99-year leasehold residential sites were characterized by a distinctly risk-averse mindset.
Huttons senior data analyst Lee Sze Teck stressed the growing risk that developers are facing. These risks include continuing high interest costs and rates, as well the reduced area that can be sold for non-landed housing projects because of changes in definitions.
Six bids for a parcel near Champions Way were received in Woodlands. They came in under expectations. Just two offers were made for Lentor Close. One more than the site which was most recently offered, but still fewer than when the state opened the Lentor Hills sites to development in 2021.
Wong Siew Ying noted that a tender in Tengah for an executive apartment site, which ended on June 27, attracted nine bids. This land rate was a record S$703 per sq. foot per plot ratio.
Analysts believe that given the high bid for the site the Champions Way Project could be launched between S$1,750-1,950 psf.