The Urban Redevelopment Authority (URA) has recently launched a tender process for a land parcel at Lorong 1 Toa Payoh.
This Toa Payoh GLS site has been added to the 2H2023 Government Land Sale (GLS) Programme’s Confirmed List.
The residential site, which spans 169,456 square feet and has a 99-year lease, has the potential to house approximately 775 residential units.
Prospective bidders must submit their proposals by 7 November 2023.
Analysts anticipate strong interest from developers due to the Toa Payoh GLS site’s well-established location and the scarcity of new private homes in the area.
Notably, no new private housing has been built in the Toa Payoh estate since 2016.
The most recent GLS site tendered in the Toa Payoh vicinity was the plot located across the road along Lorong 6 and Lorong 4, which was successfully acquired for $345.86 million ($755 per square foot per plot ratio) back in June 2015.
In May 2016, this new condominium project was introduced to the market as the 578-unit Gem Residences, with half of the units quickly sold at a median price of $1,425 per square foot.
The project was fully taken up by October 2019.
Analysing caveat data at Gem Residences, it is evident that over 50 per cent of those buyers hailed from HDB addresses, signalling a robust demand from those seeking to upgrade within this locality.
Another analyst noted that the value of 5-room HDB flats at The Peak @ Toa Payoh has surpassed $1 million.
Furthermore, many flats that have recently reached their minimum occupancy period (MOP) now exceed $800,000.
This suggests a substantial group of potential HDB upgraders who may opt to reside in this highly desirable housing estate.
The Toa Payoh GLS site is located within close proximity to Braddell MRT Station on the North-South Line and it is also close to prestigious institutions such as Pei Chun Public School, CHIJ Primary and Secondary (Toa Payoh), and Raffles Girls School (Secondary), etc.
Market watchers anticipate 5 to 8 bidders for the Toa Payoh GLS site, with the highest bid likely falling between $1,100 and $1,250 per square foot per plot ratio (psf ppr).
However, a few analysts have taken a more cautious approach, pointing out that developers may exercise restraint in their bidding.
This is due to recent lukewarm responses to GLS tenders and lower take-up rates at launches, which are exacerbated by the market’s abundance of options for buyers.
Some forecasted only 4 to 5 bids, with the winning bid ranging from $783 million to $854 million (equating to a land rate of $1,100 to $1,200 psf ppr).
Noting that two other GLS tenders for sites on Clementi Avenue 1 and Pine Grove (Parcel B) are set to close on the same day, developers’ attention may be divided.