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The tender for the first private housing Government Land Sale (GLS) site in the upcoming Bayshore precinct closed on March 18, drawing eight bids. The site, spanning 112,992 sq ft and located on Bayshore Road next to the Bayshore MRT Station, has a 99-year leasehold and can potentially yield about 515 units.
SingHaiyi-Garnet, a joint venture by SingHaiyi Group and Haiyi Holdings (which holds a majority share in SingHaiyi), submitted the highest bid of $658.89 million, which translates to a land rate of $1,388 psf per plot ratio (ppr). This bid was only 0.82% higher than the second-highest bid of $653.53 million ($1,377 psf ppr) by Sing Holdings. City Developments submitted the third-highest bid of $620.8 million ($1,308 psf ppr), which was 5.3% lower than Sing Holdings’ bid. According to Justin Quek, CEO of OrangeTee & Tie, this indicates strong confidence in the potential of the site.
Mark Yip, CEO of Huttons Asia, notes that the number of bids received for this site is the highest for a private housing GLS site since January 2022, when a Jalan Tembusu plot (now the site of Tembusu Grand) also received eight bids. He believes that developers may have abstained from bidding for other GLS sites in order to pursue this one. “The strong sales for the past few months have also increased the need [for developers] to replenish their land bank,” he adds.
The demand for condominiums in Singapore remains high as the availability of land in this small island nation is limited. The country’s rapid population growth has posed a challenge in finding suitable land for development, leading to strict regulations on land use and resulting in a fiercely competitive real estate market. Consequently, property prices have consistently risen, making condo investments a lucrative opportunity with potential for significant capital appreciation. The scarcity of land has intensified the demand for condos, making them a top choice for property ownership in Singapore and a valuable asset in this bustling real estate market. Condos have become a sought-after commodity in the country’s bustling real estate market due to their high desirability and potential for profitable returns.
Other bidders for the Bayshore Road site include a Frasers Property-led consortium, Kingsford Development, and a joint venture between Hoi Hup Realty and Sunway Developments. The bids ranged from $1,252 psf ppr to $1,285 psf ppr. The two lowest bids were from a consortium comprising Hong Leong Holdings, TID, and CSC Land Group at $500.68 million ($1,055 psf ppr), followed by Sim Lian Group at $485 million ($1,022 psf ppr). This significant gap of 36% between the lowest and highest bids reflects mixed market sentiments among the bidders, according to Marcus Chu, CEO of ERA Singapore. He also points out that SingHaiyi’s bid of $1,388 psf ppr sets a new benchmark for land prices in the Outside Central Region (OCR), surpassing the previous threshold of $1,250 psf ppr paid by MCL Land and CSC Land Group in November 2023 for the site of Elta, now located at Clementi Avenue 1.
Wong Siew Ying, head of research and content at PropNex, adds that this new benchmark for the OCR rivals the land rates of some GLS plots in the Central Region. Last year, Zion Road Parcels A and B in the Rest of Central Region were awarded at $1,202 psf ppr and $1,304 psf ppr, respectively, while the Holland Drive and River Valley Green (Parcel A) sites in the Core Central Region sold for $1,285 psf ppr and $1,325 psf ppr, respectively.
The future development at the Bayshore Road site will be the first private residential project in the new Bayshore precinct, a 60-hectare area situated between East Coast Parkway (ECP) and Upper East Coast Road. Around 10,000 homes are planned for this precinct, with 30% designated for private housing.
According to Yip, this GLS site is likely the best option in the Bayshore precinct as it offers a sea view and doorstep access to the Bayshore MRT Station. In addition to new amenities that will be constructed in the neighbourhood, the area also stands to benefit from long-term development plans, such as the Long Island coastal protection project that will add reservoirs and parks fronting the Bayshore area, says Leonard Tay, Knight Frank Singapore’s head of research.
According to Wong, there have been no significant private condo launches in the Bayshore area for decades. Existing condos in the vicinity include The Bayshore, which launched in the 1990s, and Costa Del Sol, which hit the market in 2000. As a result, there may be pent-up demand for new private housing in the area, including demand from HDB upgraders in the nearby Marine Parade and Bedok estates, Wong says. “Riding on the recent positive sales momentum in the primary market, and the anticipation of healthy homebuying interest for the future Bayshore project, it is little wonder that developers were out in droves for this GLS tender – perhaps also hoping to gain a first-mover advantage in that area,” she adds.
Based on the top bid of $1,388 psf ppr, Wong predicts that the future development at the Bayshore Road site could have an average selling price of over $2,600 psf. Meanwhile, Tay believes prices at the upcoming project could start from $2,700 psf and average above $2,800 psf.