GLS tender closing of Dairy Farm Walk and Tengah Garden Avenue

The burst of homebuyer activity in the final quarter of 2024, highlighted by the near sell out of Emerald of Katong might have brought optimism back to the private residential market, but most developers continue to remain cautious as participants at the first government land sale (GLS) tender close of the year.

There were two bids for the Dairy Farm Walk plot and three for the Tengah Garden Avenue parcel. With the new year starting on the back of encouraging sales witnesses in October and November 2024, other developers could have decided to concentrate on the existing sites that are presently being prepared for launch in 2025.

The effect of continued albeit lesser than expected interest rate cuts together with the pent up demand that was unleashed in November 2024, should provide base support for new launch projects in 2025. Although, the burst of homebuyer activity in last Q4 is likely to ease into more sustainable levels and pace of take up over the next the few quarters, demand will be underpinned by household net worth in Singapore that remains on a steady path of improving affluence, a low unemployment rate, and wealth that is passed down from earlier generations of Singaporeans that have benefitted from asset appreciation.

Tender Closing for Dairy Farm Walk Government Land Sale (GLS) Site

The top bid of $1,020 psf per plot ratio (ppr) at Dairy Farm Walk is a bullish bid that is above expectations, given The Botany at Dairy Farm that was launched in Q1 2023, currently under construction, as well as several completed projects in the vicinity. Perhaps with 98% of the units at The Botany at Dairy Farm sold as of November 2024, the consortium that submitted the top bid was keen to continue supplying new product to the Dairy Farm area with its apparent popularity. The top bid exceeds the second and only other bid by 23.1%. On a psf ppr basis, this unit land rate is also 4.1% higher than the earlier Dairy Farm Walk GLS site that was awarded in March 2022 at a land rate of S$980 psf ppr, the site of The Botany at Dairy Farm.

At a land price of S$1,020 psf ppr, the breakeven cost could possibly range between S$1,900 psf and S$2,000 psf depending on technical, material and design considerations, with launch prices starting from S$2,100 psf. With a possible average price of above S$2,200 psf when launched, this might appeal to HDB upgraders in the west of Singapore, employees working in the commercial and industrial zones in the west, as well as local homebuyers looking to downgrade from landed housing in the nearby Chestnut and Cashew landed estate.

Tender Closing for Tengah Garden Avenue Government Land Sale (GLS) Site

The Tengah Garden Avenue site garnered a top bid of S$675 million or S$821 psf ppr at today’s tender, with the spread between the highest and lowest tight at a mere 1% among the three bidders. This land rate of S$821 psf ppr would likely translate into a possible an average selling price of about S$2,000 psf. Although this is untested territory in a newly developing housing estate with developers putting in fairly conservative bids taking into account the ancillary retail component, the project will pique the interest of first-time homebuyers and upgraders such as young families.

Ancillary retail facilities of about 30,000 sf integrated into the development in an area that does not have many amenities at the moment, immediate access to the future Hong Kah MRT Station, and with Anglo-Chinese School (Primary) moving to Tengah becoming a co-ed school from 2030, a residential development on this site should be attractive to homebuyers.