_ GLS Tender Closing - Bukit Timah Link and Hillview Rise

Leonard Tay November 04, 2022

Tender Closing for Residential Sites – Bukit Timah Link and Hillview Rise

The five bids for Bukit Timah Link and the four bids for Hillview Rise was decent, all things considered, as the economic outlook has taken a pessimistic turn with increasing interest rates, inflation and recessionary pressures. Despite this, developers are still keen to acquire land to provide new product to a private residential market that is currently under supplied. It is challenging times for developers, having to manage the risks of high construction costs, government intervention with cooling measures, paying non-remissible Additional Buyer’s Stamp Duties (ABSD) as well as having to sell out within five years so as not to be liable for even more ABSD, revised Gross Floor Area (GFA) definitions such as air-conditioner ledges to be included as GFA, etc. In addition, with increasing interest rates, developers now have to consider whether some homebuyers will turn and camp on the sidelines, adopting a watch-and-wait approach until economic uncertainties play themselves out.

Bukit Timah Link

The tender for the Bukit Timah Link site closed with five bids. The top bid of S$200 million, or S$1,343 psf ppr (per plot ratio), is 15.7% higher than the second highest bid of S$1,161 psf ppr and 44.4% from the lowest bid of S$930 psf ppr.
Adjacent to the Bukit Timah Link land parcel is The Linq @ Beauty World, which fully sold all of its 120 residential units by the end of 2020. Moreover, with the upcoming integrated project located at the Jalan Anak Bukit site that was awarded in June last year, the potential competition stemming from the development could have deterred some developers from participating in the tender.
Nevertheless, the future development at Bukit Timah Link could still attract keen interest from prospective buyers due to the transport connectivity afforded by immediate access to Beauty World MRT Station as well as the integrated bus interchange at the Jalan Anak Bukit development.
The site is also close to amenities that include a wide variety of retail options. And although the pool of prospective homebuyers may now be smaller as a result of the clouded economic outlook, the more palatable total of about 160 residential units would mitigate some of the development risks. It is likely that prices of homes at the new Bukit Timah Link project could start from S$2,300 psf, and perhaps range up to S$2,500 psf.

Hillview Rise

Competition was modest among developers with the highest bid submitted at S$320.8 million (S$1,024 psf ppr). This bid price is 1.3% higher than the second highest bid of S$316.8 million (S$1,011 psf ppr) and 13.3% higher than the lowest at $283 million ($903 psf ppr). The bids were relatively close on a psf ppr basis, as developers are still interested in topping up their land inventory amid prevailing economic headwinds affecting sentiments of homebuyers.
Estimated to house 335 residential units, the site is walking distance to Hillview (DT3) MRT station on the Downtown Line and also retail amenities at Hillv2 and The Rail Mall. The site is also located close to Dairy Farm Nature Park which connects to Bukit Timah Nature Reserve in the south.
The land parcel for the adjacent Midwood project was awarded in July 2018 at a land price of S$460 million (S$1,068 psf ppr), setting a record high land price in the Bukit Batok Planning Area. Midwood has since sold out in H1 2022, at prices between S$1,650 psf and S$1,750 psf. While a land price of S$1,068 psf ppr is higher than today’s top bid of S$1,024 psf ppr, construction costs are now much higher in the post-pandemic era compared to 2018.
As such, a new private residential project at Hillview Rise would most likely start selling from S$1,800 psf onwards to average around S$2,000 psf.