Both sites were launched for tender in Q1 2022 under the Confirmed List on the 1H 2022 government land sales (GLS) programme. The tenders closed on 2 June 2022 with just a handful of bids, albeit at robust prices. This reflects healthy developer interest for these two prime sites, as well as their confidence in the Singapore residential market, even post-cooling measures.

Dunman Road

In terms of potential dwelling units, this is the largest GLS site sold since Silat Avenue (now Avenue South Residence) in April 2018. Exceeding the SGD1 billion mark and coming with higher risks to sell by the ABSD timeline of 5 years, it is therefore not surprising that there were only two bidders. These developers were perhaps encouraged by the sales at nearby Liv@MB, where over 74% were sold at a median unit price of SGD2,400 psf.

At the beginning of the year, another nearby GLS site at Jalan Tembusu was sold at SGD1,302 psf ppr, while two freehold land parcels at Thiam Siew Avenue were sold at a land rate of around SGD1440 psf ppr. Therefore, the price of SGD1,350 psf ppr between these two benchmarks is within expectations.

Pine Grove (Parcel A)

At a more digestible size and price of SDGD671.5 million, there were more bids for the pine grove (parcel A) site, with water-tight margins of less than 8% between the first three bidders. Nevertheless, the five bids was still lower than the average of 7 bids received for tenders closed this year. This could be attributed to the planning restriction of 520 units to manage traffic flow, which might impose some planning inflexibility for the developer.

The site is nestled in a prime residential area. There is likely to be pent-up demand for residential units in the area as there has not been a site launched in the vicinity, nor district 21 since 2018, when the site at Jalan Jurong Kechil (now Verdale) was sold. 

Colliers Research Views

Overall, the batched bidding exercise did not seem to have dampen developers’ appetite for residential land; with some developers even going for both plots even though they are both relatively larger sites (at over 500 units each). Colliers has observed that some developers have chosen to spread out their risks by bidding in partnerships.

This is a reflection of the bullish sentiments amongst developers, and their confidence that there will still be buying power and demand. They might have been encouraged by the healthy home sales performance in the past few months, with robust take-up by locals and even bulk purchases by foreigners at some projects. Further, the end-product from these sites would probably cater to the higher-end buyers who will have the purchasing power, and are also less affected by the cooling measures.