_Knight Frank Commentary (GLS Tender closing of Lakeside Drive)

Tender Closing for GLS Site

Lakeside Drive
There were six bids for the Lakeside Drive site, as activity from developers at government land sales (GLS) tenders resumed after there were no bids at the Media Circle (Parel B) site when it closed on 29 April, and a mere two bids at Lentor Gardens which closed on 3 April. However, for parcels that come with attractive property attributes, developers continue to show interest given that domestic demand for new non-landed homes continue to remain supported at the moment. Although developers remain mindful of development costs that constitute land and construction costs, as well as taxes, the attractiveness of the Lakeside Drive site surmounted some of these concerns. While the last GLS plot was Lake Grande in 2015, there have been a few recent successful enbloc transactions for private land sites in the vicinity at Yuan Ching Road such as Lakeside Apartments (the current The LakeGarden Residences project) and Park View Mansions (the current Sora project), demonstrating developers’ preference for the Jurong Lakeside area. This could be due to the growth potential inherent in the government’s long-term vision for a vibrant, mixed-use precinct intended to become Singapore’s second Central Business District.

The top bid of S$608 million reflecting S$1,132 psf per plot ratio (ppr) comes in slightly above expectations.  With a top bid at a land rate of S$1,132 psf ppr, the selling prices at launch could possibly start from above S$2,300 psf and average between S$2,400 psf to S$2,500 psf depending on the design and finishes of the project. Demand for this site could mainly stem from local homebuyers comprising HDB upgraders from nearby Bukit Batok, Jurong East and West housing estates. The planning areas of the west (Boon Lay, Jurong East, Jurong West, Pioneer, Tuas and the Western Islands) also comprise a substantial industrial employment zone with almost 220,000 working population according to the 2020 census, and some of the executives who work in the nearby industrial areas there might favour an easy commute to work. Located adjacent to Lakeside MRT station on the East-West Line, the site enjoys immediate connectivity to the rest of Singapore. It is also situated next to Jurong Lake Gardens providing residents with easy access to recreational green spaces. Proximity to established primary schools like Shuqun, Rulang, Boon Lay Garden, and Lakeside also increases its appeal to families with young children.