Developers take cautious stance in land tenders for Woodlands, Lentor housing sites

CDL puts in top bid of S$904 psf ppr for Woodlands parcel; Hong Leong, GuocoLand and CSC Land pip Frasers for Lentor plot at S$982 psf ppr

Sep 12, 2023

The plot along Champions Way in Woodlands is for a residential development comprising around 350 private homes.

BIDS for two 99-year leasehold private housing sites on Tuesday (Sep 12) reflected distinctly more risk-averse sentiment among developers, following several waves of cooling measures and sharply higher financing costs.

Some six bids competed for a parcel along Champions Way in Woodlands, with offers coming in below expectations. At Lentor Close, just two offers were submitted, one more than for the latest site tendered in the area, but far fewer than the nine received in 2021, when the state first released sites in Lentor Hills for development.

In comparison, a tender for an executive condominium site in Tengah, which closed on Jun 27, drew nine bids and a record land rate of S$703 per square foot per plot ratio (psf ppr), noted Wong Siew Ying, head of research and content at PropNex Realty.

“In recent tenders, developers displayed low risk appetites, preferring sites with fewer than 500 buildable units and hence, lower risk of not being able to sell everything within the five-year ABSD timeframe; as well as sites in the suburbs where demand is less affected by cooling measures, and those with differentiating factors such as proximity to transport nodes, good schools and limited competing supply,” said Tricia Song, head of research for South-east Asia in CBRE.

Nicholas Mak, chief research officer at, said all the bids in the latest state land tender had come in under S$1,000 psf ppr. “A year ago, the government land sale tenders for similar land parcels were attracting bids that exceeded S$1,000 psf ppr.”

Huttons senior director of data analytics Lee Sze Teck pointed to the growing risks that developers face. These include continued high interest rates and costs, as well as a reduction in saleable area for non-landed residential projects due to changes in definitions of gross floor area, he said.

Leonard Tay, research head at Knight Frank, found the S$904 psf ppr top bid for the Champions Way site to be “slightly optimistic” for the Woodlands area.

This is especially so “when contrasted against the current uncertain economic conditions, the growing conservative stance of homebuyers affected by inflation, rising borrowing costs and the spectre of government cooling measures”, he said.

Given the top bid for the site, analysts anticipate the Champions Way project could eventually be launched at between S$1,750 and S$1,950 psf.

The top bid for the Woodlands plot was placed by City Developments Limited (CDL). It came in 8.3 per cent higher than the next highest bid of S$272.3 million or S$835 psf ppr from TID Residential, a joint venture between Hong Leong Holdings and Mitsui Fudosan.

This was followed by an offer from Qingjian Realty and China Communications Construction Company at S$240 million or S$736 psf ppr – 13.4 per cent lower than that of TID Residential. The bottom two bids, from an MCL Land-Sinar Mas Land joint venture and Thakral Corporation, were 25 to 30 per cent lower than the top bid.

“The wide dispersion between the bids point to an inflection in the property market, with a wide range of expectations held by market players,” said Lam Chern Woon, Edmund Tie’s head of research and consulting.

He added that CDL’s “bullish bid” was likely due to the impending completion of the Singapore-Johor Rapid Transit System (RTS), which will “dramatically improve connectivity” between the two sides of the Causeway.

“Prices of homes in Woodlands could be re-rated when the RTS is completed in 2026,” he said.

Knight Frank’s Tay also observed that Woodlands’s regional centre is the most underdeveloped, compared to Tampines and Jurong East, “and hence the one with the most potential for growth”.

The site is also the first private residential government land sale (GLS) site launched in Woodlands since the Woodlands Avenue 2/Rosewood Drive plot was sold for S$151.5 million or S$367 psf ppr to a joint venture between Fragrance Group and Aspial Corporation in June 2011, said Chia Siew Chuin, head of residential research, research and consultancy at JLL. It has since been developed into the 689-unit Parc Rosewood.

CBRE’s Song noted that “comparables such as Woodhaven and Parc Rosewood trade at median prices of S$1,229 to S$1,301 psf this year-to-date, while the ECs completed between 2016 and 2017 – Bellewoods, Twin Fountains and Forestville have changed hands in the resale market at S$1,112 to S$1,182 psf so far this year”.

Rising HDB flat prices in Woodlands could support HDB upgrader demand for the new project, said Eugene Lim, key executive officer at ERA Realty. More than 320 executive flats have been sold since 2022 for an average price of S$799,000, said Lim.

In a statement released after the tender results were announced, CDL group chief executive officer Sherman Kwek said: “Following a series of successful launches in Singapore, our inventory of launched projects has been reducing. This site will replenish our landbank and ensure a stable launch pipeline.

“It has been over a decade since a private residential project was launched in Woodlands, so this is a rare opportunity to create a vibrant and sustainable icon alongside the government’s rejuvenation plans.”

CDL has plans for four 11-storey blocks totalling around 350 private homes, a basement car park and an early childhood development centre on the site.

Saturation in Lentor

Of the two bids submitted at the close of the Sep 12 tender for the Lentor Central plot, the top bid of about S$435.2 million or S$982 psf ppr came from a joint venture between Hong Leong Holdings, GuocoLand and China Construction (South Pacific) Development Co.

This bid was within expectations, and a shade lower than the S$985 psf ppr offered by GuocoLand and Hong Leong as the sole bidder for the last Lentor Hills parcel tendered in April. On a psf basis, that was then the lowest among the five sites in Lentor Hills Estate sold since July 2021.

As Knight Frank’s Tay pointed out: “The two bids for the Lentor Central plot reflect the increasingly tentative and defensive sentiment among developers, as well as the fact that the Lentor area might have too many condominium projects, all being developed within a few years of each other.”

Up to seven sites – including one site on the government’s reserve list – could be sold in the area, bringing about 3,500 new units and “translating to almost 11,000 new residents at the average Singaporean household size of 3.09”. “This might constitute too many homes, and people, in an area of less than 0.5 sq km, to be developed within a span of three to six years, assuming all seven sites are sold,” said Tay.

Still, going in together would enable GuocoLand and Hong Leong “to better manage competition” in the area, said JLL’s Chia. “With this bid, GuocoLand and Hong Leong Group, who had also partnered earlier and have stakes in three of the five Lentor sites previously tendered, will secure an even stronger position in the locale,” said Chia.

Mak from added that “joint ventures (lower) the risk of undertaking a development project in the Lentor area”.

Average launch price for the Lentor Close project is expected to be in the range of S$1,950 psf to S$2,200 psf.

A Hong Leong spokesman said: “If awarded, we plan to build a private residential development with about 475 units in two high-rise blocks, where residents will benefit from the convenience of nearby amenities and Lentor MRT station, adding to the site’s overall appeal to future buyers.”

In September 2022, a Lentor Central site went to China Communications Construction Company, Soilbuild Group and Yanlord Land Group for S$1,108 psf ppr. The Lentor Hills Road (Parcel B) plot was sold to TID Residential for S$1,130 psf ppr.

OrangeTee & Tie deputy chief executive officer Justin Quek said demand for private homes in Lentor has generally remained strong.

The first new project to come up in the estate, GuocoLand’s 605-unit Lentor Modern, sold 84 per cent of units during its launch weekend, at prices ranging from S$1,856 to S$2,538 psf. Based on URA data, just 8.1 per cent or 49 unsold units remain as at July 2023, said Quek.

GuocoLand had bagged the site for S$784.1 million or S$1,204 psf ppr in July 2021.

The second project, mixed-use integrated project Lentor Hills Residences, saw a cooler response in July, coming after a wave of cooling measures. The Hong Leong, GuocoLand and TID project sold around half its 598 units on its launch weekend, at an average price of S$2,080 psf.