ANALYSIS: What’s next for the Jurong Lake District GLS site?
By Elizabeth Choong
/ EdgeProp Singapore |
In September, URA announced that the JLD white site will not be awarded because the bid price was too low. (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) – This year, four government land sales (GLS) sites were not awarded, with the Jurong Lake District (JLD) site being the largest in size. The JLD site was put up for tender in June last year, and the tender closed in March with only two bids. Both bids were submitted by the same consortium, comprising CapitaLand Group, City Developments Ltd, Frasers Property, Mitsubishi Estate Co., and Mitsui Fudosan Co. Ltd.
The JLD site was launched as a Concept and Price Revenue tender, where submitted bids are first evaluated based on concept, followed by tender price. After evaluating the concepts, only one of the submitted bids for the JLD site was shortlisted by URA. However, URA announced in September that this bid of $640 psf ppr was ultimately rejected because it was deemed to be too low.
The other three sites that were not awarded are located at Marina Gardens Crescent, Media Circle, and Upper Thomson Road (Parcel A). The tender for the white site at Marina Gardens Crescent was rejected because URA found the lone bid of $984 psf ppr too low. Similarly, in October, URA announced that the top bid of $461 psf ppr for the Media Circle site, zoned for long-stay serviced apartments, was also deemed too low. The Upper Thomson Road (Parcel A) site, zoned for residential with long-stay serviced apartments, closed without any bids in June.
Of all the GLS sites not awarded this year, the JLD site is expected to have the most significant impact, as this large white site was expected to spur the development of JLD, which is set to become Singapore’s business district in the west region. This article examines the potential impact of not awarding the JLD site.
Key details of the JLD site
The GLS tender for the JLD site called for a master developer to develop three land plots totalling 6.5 ha. Plot 1 is near Jurong Town Hall and the upcoming Jurong Lake District MRT Station (Cross Island Line), which is expected to be completed in 2032. Plot 2 is located near JTC Summit, while Plot 3 is adjacent to Jurong East MRT Station (East-West Line) (see Map 1). The huge 99-year leasehold site was intended to be developed in phases over the next 10 to 15 years.
The land parcel is designated as a white site, with both maximum and minimum gross floor area (GFA) requirements for the entire site and its various allowable uses (see Table 1). An estimated 1.6 million sq ft for office use, 1,760 residential units, and approximately 807,300 sq ft for complementary uses, such as retail, hotel, or community facilities, can be developed on the site.
Importance of Jurong Lake District
Jurong Lake District (JLD) is planned to become Singapore’s largest mixed-use business district outside the CBD. The massive white site, located in District 22 and the Jurong East Planning Area, was intended to kickstart the development of JLD.
JLD is well-connected to the rest of the island via the East-West and North-South MRT Lines. The completion of the Jurong Region Line (JRL) in 2029 and the Cross Island Line (CRL) in 2032 will further enhance JLD’s connectivity.
Additionally, JLD is close to business hubs such as the International Business Park, one-north, Singapore Science Park, industrial estates in Jurong and Tuas, and Tuas Port. Nearby Nanyang Technological University and the National University of Singapore also serve as education, research and development hubs (see Map 2), which will support the innovation and manufacturing companies in the area.
To enhance the liveability of JLD, 10-minute neighbourhoods are planned around the existing Jurong East MRT Station, as well as the upcoming Jurong Lake District (CRL) and Jurong Town Hall (JRL) MRT Stations. These neighbourhoods are designed so that residents can access amenities, public transport nodes, and green spaces within 10 minutes of walking, cycling, or by public transport.
Slight decrease in resale prices for condos and HDB
When it was announced in September that the JLD site would not be awarded, the average resale price of condos in District 22 and the west region fell marginally in October. From September to October, the average prices for condos in District 22 and the west region declined by 7.8% m-o-m and 2.9% m-o-m, respectively. In contrast, the average resale price for condos islandwide ($1,739 psf) inched up by 0.7% m-o-m over the same period. Notably, the average resale price for condos islandwide ($1,739 psf) has consistently trended above that for condos in District 22 ($1,498 psf) and the west region ($1,599 psf) (see Chart 1).
However, readers should note that while resale prices for condos declined from September to October, this decrease is not expected to continue in the coming months. Resale prices for condos in District 22 and the west region are expected to trend upwards on the back of the declining interest rates and continued strong demand for condos.
Source: EdgeProp Market Trends (as at 11 November 2024)
While the impact on resale prices for condos was immediate, the effect on resale HDB flats appears to be less immediate. From September to October, the average resale price for HDB flats in Jurong East Planning Area (5.7% m-o-m), the west region (1.8% m-o-m), and islandwide (0.2% m-o-m) increased. However, in November, the average resale price for all three areas declined, with the largest decrease of 4.9% m-o-m observed for HDB flats in Jurong East Planning Area ($529 psf). Flats in the west region ($552 psf) and islandwide ($608 psf) saw smaller decreases of 1.6% m-o-m and 1.9% m-o-m, respectively (see Chart 2).
The downward price adjustments for HDB flats in the Jurong East Planning Area and the west region in November are likely due to the overall decline in HDB flat prices during that month.
Source: EdgeProp Market Trends (as at 11 November 2024)
Price performance of neighbouring developments
There are only two completed condos, one uncompleted condo, and one completed executive condo (EC) within a 1 km radius of Jurong East MRT Station (see Map 3).
Source: EdgeProp LandLens (as at 7 November 2024)
The completed condos are Ivory Heights and J Gateway, while the uncompleted condo is J’den. Westmere is the only EC in the area (see Table 2). Although Ivory Heights and J Gateway are the only nearby completed condos, Ivory Heights is significantly older, having obtained its temporary occupation permit (TOP) in 1993, while J Gateway is only eight years old, with its TOP issued in 2016. Westmere is closer in age to Ivory Heights, having obtained its TOP in 1999, and both developments are located along the same street.
Among the four residential developments, J’den is the only one that has yet to obtain its TOP. The 368-unit condo was launched in November last year and achieved a take-up rate of 88%, at an average price of $2,451 psf, on its first day of launch. J’den was also one of the top-selling projects launched last year. Reasons for J’den's stellar sales performance include its proximity to Jurong East MRT Station, several malls, and spacious layouts.
Unsurprisingly, the average price for J Gateway ($2,012 psf), the youngest development among the trio, surpasses that of Ivory Heights ($1,057 psf) and Westmere ($1,077 psf) (see Chart 3).
Notably, the average price for Westmere, an EC that was privatized in 2009, is on par with Ivory Heights, a condo that is six years older. With the exception of 2018, the average price for Westmere has been higher than that of Ivory Heights since 2008. The price increase for Ivory Heights in 2018 may be attributed to the start of preparations for a collective sale in late 2017. However, the collective sale did not go through, as insufficient signatures were collected by the deadline in September 2018.
Source: EdgeProp Market Trends (as at 11 November 2024)
Examination of the monthly sales transactions for the three developments indicates that there were no sales transactions for Ivory Heights in September. In contrast, a unit in Ivory Heights was sold in August, and two units were sold last month. The total sales volume for the three developments halved from four units in August to two units in September. However, the sale of six units in J Gateway in October gave a boost to the sales volume, which rebounded to 10 units, up from one unit in September (see Chart 4).
Source: EdgeProp Market Trends (as at 11 November 2024)
Despite the stronger sales volume for J Gateway, its average price dipped by 3.2% m-o-m to $2,020 psf last month. In contrast, the average price for Westmere inched up by 0.7% m-o-m to $1,098 psf.
What’s next?
The JLD site is currently placed on the Reserve List. This means the site will not be launched for tender until an interested developer triggers the site. Meanwhile, market sentiment seems to have improved since the Federal Reserve cut its rate by 50 basis points in September and another 25 basis points earlier this month.
Furthermore, sales performance has improved for recent condo launches. Norwood Grand achieved a take-up rate of 84% when it was launched last month. Earlier this month, the 916-unit Chuan Park achieved a take-up rate of 76% during its launch weekend. Additionally, Emerald of Katong attracted 10,000 visitors during its preview weekend last month. Encouraged by the response, a number of condos are expected to be launched before the end of this year.
The more positive outlook seems to have some impact on the GLS market as well. In October, a record-high bid of $768 psf ppr was submitted by Sim Lian Group for an EC site along Tampines Street 95.
The question remains whether the current positive sentiment is strong enough to encourage developers to trigger the JLD site. The site presents massive development potential and is likely to attract many prospective buyers for its future residential units and prospective tenants for its retail and office spaces. However, its large land size also means a substantial capital outlay and development risk for the successful bidder.
The non-award of the site had limited impact on the prices of nearby condos and HDB flats. This could be because prospective buyers and investors believe that the government’s plans for JLD and the west region will still be carried out, albeit delayed.
The JLD site is integral to the government’s plans for the west region, so the government is expected to review the tender conditions for the site to make it more appealing to developers. One possibility might be dividing the massive site into smaller parcels. The next Master Plan is expected to be revealed next year, so the government is expected to announce further plans for the JLD site then.
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