What you need to know about The Reef at King’s Dock’s four bedroom units —The Government Land Sale (GLS) site at Tengah Gardens Avenue has closed on Jan 14 with three bids. The top bid of $675 million, or $821 psf per plot ratio (ppr), was submitted by a Hong Leong-led consortium, which includes GuocoLand Singapore and CSC Land Group. The 99-year leasehold site measures approximately 273,906 sq ft and has a maximum gross floor area (GFA) of 821,720 sq ft. With the potential to yield up to 860 residential units, the site is zoned ‘Residential with Commercial at 1st storey’.
If awarded, the Hong Leong-led consortium plans to build an 860-unit condo, taking advantage of the improved connectivity brought about by the upcoming Jurong Region Line (JRL) nearby. According to Loke Kee Yeu, general manager (Projects) at Hong Leong Holdings Limited, the JRL will contribute to the development of the new Tengah estate.
The Tengah Gardens Avenue site is located near the upcoming Hong Kah MRT Station on the JRL, making it just one stop away from the upcoming Tengah Town Centre and providing a direct route to the second CBD at Jurong Lake District. Despite receiving two bids, the top bid of $821 psf ppr for the Tengah Gardens Avenue site was only 0.73% higher than the second-place bid by Chinese developer Kingsford Group. The third and final bid was submitted by local developer Sim Lian Group.
The small bid price spread of less than 1% suggests that developers are being cautious, despite the recent increase in homebuyer activity towards the end of 2024. According to Leonard Tay, head of research at Knight Frank Singapore, developers have likely chosen to focus on existing sites that are currently being prepared for launch in 2025. This is also reflected in the two bids received for another GLS site at Dairy Farm Walk, which closed on the same day.
Mark Yip, CEO of Huttons Asia, believes that developers are trying to keep their land bids reasonable to maintain attractive selling prices for buyers. He also predicts that more developers will submit joint bids for GLS sites this year to diversify risk, which may explain why the number of bids for GLS tenders has been consistently around three.
Marcus Chu, CEO of ERA, suggests that another reason for the low number of bids could be the availability of other GLS sites, with seven still open for tender and six more scheduled to launch in the first half of 2025. The current interest rates may also be playing a role in developers’ cautious approach.
Justin Quek, CEO of OrangeTee & Tie, points out that the availability of another nearby GLS site may have also impacted the interest in the Tengah Gardens Avenue site. Developers may be considering bidding on a different GLS site along Lakeside Drive and Lakeside MRT, which is scheduled to launch in April 2025.
If awarded, the Tengah Gardens Avenue site will be the first private residential site, excluding Executive Condominiums (ECs), in the Tengah HDB township. The estate’s first EC, Copen Grand, was successfully launched for sale in 2022 and sold out within a month of its launch. The Hong Leong-led consortium may see this as an opportunity to establish their presence in Tengah, having already made investments in other areas such as Lentor, Upper Thomson, and Bugis.
According to Mohan Sandrasegeran, head of research & data analytics at SRI, the first private condo in Tengah could attract a wider range of buyers than ECs, which have HDB eligibility criteria and restrictions such as a five-year minimum occupation period (MOP) and a monthly household income ceiling of $16,000.
The Tengah Gardens Avenue site is within 2km of the future Anglo-Chinese School (Primary), according to Ismail Gafoor, CEO of PropNex. As the school is set to become a co-ed school in 2030, the site’s proximity could be highly attractive to families with school-aged children.
If the site is awarded at the top bid of $821 psf ppr, PropNex estimates that the average selling price of the new private condo could be around $2,000 psf. This could potentially make it a profitable investment for buyers, as recent transactions have shown. However, with six more GLS sites scheduled to launch in the first half of 2025, developers may continue to be cautious in their bids, leading to tighter bid price spreads in future tenders.