Lentor Gardens GLS site sold for $486.8M to GuocoLand-Hong Leong
The site only received 1 bid in total and can yield around 533 private homes.
GuocoLand and a subsidiary firm of Hong Leong Group, Intrepid Investments have submitted the sole bid for the 99-year leasehold residential land in Lentor Gardens.
This site was being launched for sale under the government land sales (GLS) programme.
The joint-venture submitted an offer of $486.8 million, equating to a land rate of $985 per square foot per plot ratio (psf ppr).
A spokeswoman for GuocoLand mentioned that for the Lentor Gardens GLS site, the group foresees a brand new high-end private residential building with approximately 533 units and 600 square metres of facilities for childcare.
She added that the future construction will also complement the firm’s other two impending projects, Lentor Modern and Lentor Hills Residences, as part of its efforts to turn the Lentor Hills housing estate into a prestigious residential neighbourhood.
According to one market watcher, the $985 psf ppr winning offer is the lowest submitted for a land parcel within the Lentor precinct.
It is also the first residential GLS tender to get only one offer since 2018, when a consortium that was led by UOL Group won the Silat Avenue GLS site for $1.03 billion.
It then became the new residential project known as Avenue South Residences condo and was launched for sale back in September 2019. It is now completely sold out.
In September of last year, the last two GLS residential sites to be sold within the Lentor precinct were at Lentor Central and Lentor Hill (Parcel B).
China Communications Construction, Soilbuild Group Holdings, and United Engineers made a bid of $481.03 million (or $1,108 psf ppr) to win the Lentor Central plot.
On the other hand, TID (jointly formed by Hong Leong Group and Japanese firm, Mitsui Fudosan) was the highest bidder for Lentor Hills (Parcel B) for $276.36 million (or $1,130 psf ppr).
The two plots of land can provide approximately 470 and 265 private homes, respectively.
Previous to this, a GLS property on Lentor Hills Road (Parcel A) was acquired for $586.6 million (or $1,060 psf ppr) in January 2022.
GuocoLand, Hong Leong Holdings, and TID (a joint venture formed by Hong Leong Holdings and Mitsui Fudosan) are slated to soon unveil the 598-unit Lentor Hills Residences.
In September of last year, when GuocoLand introduced the Lentor Modern integrated development, 84 percent of the total 605 apartments available were sold during the launch weekend.
The project is 88 percent sold at an average price of $2,104 psf based on reservations. In July 2021, GuocoLand acquired the GLS site for $784,1 million ($1,204 psf ppr).
Market watchers have noted that bids have decreased after the inauguration of the first GLS site in Lentor, and believe that this is likely due to the fact that developers are wary of a region where the government has consistently offered land for sale.
In addition, it was noted that property developers may have been deterred by the uncertain economic outlook and the possibility of incurring Additional Buyer’s Stamp Duty if they are unable to sell all apartments within 5 years.
Under the 1H 2023 GLS programme, two additional GLS plots in Lentor are up for sale.
This month, the Lentor Central is anticipated to be put out for bidding, while another site at Lentor Gardens is being placed on the Reserved List. Both sites can yield around 475 and 500 private homes respectively.
Knight Frank Singapore observes that all seven residential sites in Lentor – one closed tender, four sold sites, and two still available for sale – may potentially provide 3,500 new homes.
This would equate to about 11,000 additional residents.
Hence, it believes that developers may be contemplating whether this is too many residential units and people to be created in less than 0.5 square kilometres within 3 to 6 years, assuming all seven plots are sold..
Yet, it emphasises that the subject site of Lentor Gardens is within walking distance of the Lentor MRT station.
The site’s proximity to public transportation and recreational attractions could draw prospective homebuyers.
On top of that, Knight Frank believes that the Lentor Gardens GLS site’s proximity to CHIJ St Nicholas Girls’ School will definitely appeal to parents of school-aged children.
Furthermore, retirees and older citizens now residing in the landed estates around Lentor and Yio Chu Kang Road may contemplate downsizing their homes as their space needs and priorities change, providing a supply of potential buyers for the new condominium in this region.
The Lentor Gardens GLS site can yield around 530 dwelling units and units may be sold at prices between $1,950 and $2,050 psf.