• CDL, Hong Leong-Guocoland came out tops in the first GLS post recent cooling measures 
  • Robust bid prices compared to more tempered bids from other developers, implying the group’s more optimistic view of property market
  • Estimated launch prices in Jalan Tembusu and Lentor may touch S$1900psf to S$2,000 psf 

What’s New

CDL and Hong Leong-Guocoland came in tops in latest GLS tenders. 

The tender close of two government land sales (“GLS”) sites closed this evening saw active participation amongst property developers per expectations. The site at Jalan Tembusu drew eight bids with City Developments Limited (“CDL”)  topping the bid, while the site in Lentor Hills (Parcel A) attracted four bids, with a consortium involving Hong Leong-Guocoland taking the top spot. These tenders are the first closing post the most recent property cooling measures imposed in the middle of Dec’21 and provided us the insights on developers’ views on pricing. While we saw more tempered bids from developers, we note that CDL, Guocoland, and Hong Leong took a more optimistic approach in their bid prices. 

Jalan Tembusu site – CDL comes in tops for a site rich with amenities, food, and popular schools. 

CDL emerged the top for this 99-LH site with a bid of S$768m or S$1,302 psf per plot ratio (psf ppr), which is c.6% higher than the second-highest bidder from a consortium from Hong Leong-Guocoland and is close to 65% higher than the average bids from the eight bids submitted for the site. We do note that apart from the top two bids, the prices for the remaining six developers appear to be more moderate ranging from S$566 psf (from Allgreen) to S$710psf from Sim Lian. We estimate that breakeven for CDL should be in the range of S$1,900psf to S$1,950 psf, implying launch prices closer to north of S$2,000 psf. 

With the Jalan Tembusu site expected to yield up to 640 units, this is expected to be one of the largest residential developments in the area, where current property developments are largely of a smaller scale in nature. Nestled in a district with a variety of amenities and food options near Parkway Parade, the project is only 600m away from the upcoming Tanjong Katong MRT (Thomson-East Coast Line 4). The site is also located next to popular schools – Tanjong Katong Girl’s School and Chung Cheng High School, which may attract families. 

Lentor Hills (Parcel A) – Guocoland doubles down on Lentor. 

Amongst the four developers that bid for the site, we do note that bid prices are in a fairly close range of between S$905psf (lowest) to S$1,060 psf (highest bid) with a consortium involving Hong Leong-Guocoland coming in top. At the price of S$586m or S$1,060 psf, we estimate breakeven to be close to S$1,650 psf–S$1,700 psf, implying that launch prices may range between S$1,900 psf and S$2,000 psf. 

The site is located next to upcoming launch Lentor Modern, from Guocoland, a mixed use 605-unit residential site next to the Lentor MRT. The top bid from the Hong Leong – Guocoland will allow the latter to defend its position as it prepares its launch for Lentor Modern. If awarded the tender of Lentor Hills (Parcel A) which is expected to yield 595 units, Guocoland will have exposure to over 1,000 units within the Lentor area.