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Kheng Leong and Low Keng Huat submit top bid of $793 psf for Canberra Crescent GLS site
By Timothy Tay | July 18, 2024

The GLS site at Canberra Crescent is at the junction of Canberra Street and Canberra Crescent.

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Kheng Leong and Low Keng Huat have jointly submitted the top bid of $279 million for a residential government land sale (GLS) site at Canberra Crescent. This works out to a land rate of $793 psf per plot ratio (PPR).

At the close of the tender on July 18, the 219,985 sq ft site attracted a total of three bids.

The second highest bid was submitted by a consortium of companies consisting of Santarli Realty, Apex Asia Real Estate Holdings, BHCC Construction, and Heeton Holdings. The consortium put in a $275.09 million bid which is just 1.4% lower than the top bid.

Meanwhile, the third bid came from GuocoLand which submitted a $228.77 million bid for the GLS site.

Read also: ANALYSIS: Tenders for three GLS sites are closing in July. Will they attract any bids?



“Given today’s market conditions where buyers are cautious, the presence of three bidders indicates a fair amount of competition. While developers saw an opportunity in the Canberra, they are genuinely concerned about higher development costs," says Marcus Chu, CEO of ERA Singapore.

Wong Siew Ying, head of research and content at PropNex Realty, notes that the top bid land rate of $793 psf ppr is below her expectations, and if the site is awarded, would be the lowest land rate for an Outside Central Region (OCR) GLS site (excluding Executive Condo sites) since 2020.

She adds that the future development could see an average selling price of above $1,850 psf – which would be slightly lower than the average price of new launches in the OCR that have been generally trending at around $2,100 psf.

Meanwhile, Chia Siew Chuin, head of residential research, research & consultancy at JLL, points out that GuocoLand's bid price of $228.77 million is 22% lower than the top bid. "This shows the disparity in outlook among developers, and the measured bids display their reduced risk appetite and opportunistic approach given the more challenging market environment characterised by elevated costs, increased risks, and a slowdown in new home sales," she says.

The GLS site at Canberra Crescent is at the junction of Canberra Street and Canberra Crescent in District 27. The site has a gross plot ratio of 1.6 and the new development could yield up to 375 units. The site is close to Bukit Canberra, an integrated sports and community hub featuring amenities like a hawker centre, a swimming pool, and an indoor sports hall.

The land rate of $793 psf ppr submitted by Kheng Leong and Low Keng Huat for the GLS site at Canberra Crescent is higher than the $644 psf ppr that was put up by JBE Holdings when it was awarded the tender for a 143,326 sq ft site along Canberra Drive in 2020. The land rate translates to an absolute price of $129.2 million.

Read also: No bids submitted for Upper Thomson Road GLS site

This site is being developed into the 219-unit project The Commodore, which was launched in November 2021. The development was fully sold last June and the average selling price was about $1,400 psf.

Next to The Commodore was another GLS site on Canberra Drive that is being developed by UOL Group into the 448-unit The Watergardens at Canberra. UOL was awarded the 296,722 sq ft plot when it submitted the winning bid of $270.2 million ($650 psf ppr) in 2020.

The Watergardens at Canberra was launched in August 2021 and was fully sold by March 2023, achieving an average selling price of $1,686 psf.

The Watergardens at Canberra is a 448-unit development by UOL Group. (Picture: Samuel Isaac Chua/The Edge Singapore)

Chu also points out that the top bid submitted by Kheng Leong and Low Keng Huat is approximately 12.4% to 14.0% lower than the winning bids registered for recently-awarded GLS sites in the North region, such as Champions Way ($904 psf ppr) and Upper Thomson Parcel B ($905 psf ppr).

Justin Quek, CEO of OrangeTee & Tie, says that the palatable size of the Canberra Crescent GLS site is within the risk appetite of most developers looking to stock up their land bank. He also expects pent-up demand for new private residential units in this area will be high given that The Commodore and The Watergardens at Canberra are sold out.

"There are no other land parcels marked for sale in the near future after the announcement of the 2H2024 GLS programme. There may be enough pent-up demand to sustain sales at this location when the future project launches," says Quek.

Read also: GLS sites at Dairy Farm Walk and Tengah Garden Ave launched for sale, Bayshore Rd site open for application

This sentiment is echoed by Chu, who says: "With the exception of Champions Way and Upper Thomson, there is an absence of upcoming new launches in the North, which could explain developers’ willingness to bid for the site. The relative lack of competition places Canberra Crescent in an attractive light, especially for parties keen on plugging up the supply gap in non-landed private housing".

Land bids reflect mixed sentiment among developers

The close of the tender for the GLS site at Canberra Crescent was batched with two other GLS site that also closed on the same day - a land parcel at Zion Road and a site along De Souza Avenue.

Allgreen Properties submitted the highest bid of $730.09 million ($1,304 psf ppr) for the 99,953 sq ft site at Zion Road, while the highest bid of $278.9 million ($841 psf per ppr) was submitted by Sustained Land.

“From the bids received for the closing of the GLS sites at Canberra Crescent, De Souza Avenue, and Zion Road (Parcel B), it is apparent that developers are experiencing mixed sentiments about the market, with some putting in bids that were lower than expected," says Chu.

Leonard Tay, head of research at Knight Frank Singapore, opined that the level of interest for the three GLS site was 'fairly quiet' as developers grapple with elevated interest rates, cooling measures, and the high costs of development that include punitive measures such as when deadlines to sell out are not met.

"With some indication that interest rates could ease before the end of the year, some developers may have decided to go ahead with pre-emptive land banking," says Tay.

This sentiment was echoed by Wong of PropNex. "Overall, we think the tender results announced today are generally in line with the conservative bidding that we have seen in GLS tenders so far this year, as the cautious market sentiment, muted sales, and an ample supply pipeline of new private homes likely suppress developers’ appetite for sites".

She adds that the conservative bid prices in recent GLS tenders will provide more flexibility and leeway for developers in pricing their projects when they are launched in the future.

Chia of JLL, says that the conservative stance adopted by most developers has been observed since 2H2023, in an effort to reduce capital expenditure and mitigate development risks that stem from concerns about high financing costs, tight profit margins and slowing buyer demand. "Primary market sales have slowed and declined to a 15-year low of 6,421 units in 2023 due to cost-consciousness among buyers, a sluggish economy and elevated interest rates. The cautious sentiment among buyers resulted in a developer sales tally of 1,916 units in 1H24, down 43.4% from 3,383 units sold in 1H23 and 54.6% lower than the 4,222 units sold in the same period in 2022".


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