GLS tenders seeing lower participation rate, but higher bids: experts

In the recent tender, the highest bid price was $1,360 psf ppr for the Lorong 1 Toa Payoh site.

Land parcels under the Government Land Sales (GLS) programmes are seeing fewer bids, with recent sites launched for tenders such as Pine Grove (Parcel B) and Lorong 1 Toa Payoh only receiving three each.

The Clementi Avenue 1 site, on the other hand, attracted six bidders. According to Knight Frank, the site likely attracted more bidders because it is the smallest of the three plots in terms of gross floor area, hence, having the " smallest land cost outlay among all the tenders that closed."

Despite the lower participation rate in the recent GLS tenders, Knight Frank underscored that "developers were willing to place bullish bids to secure top position."

The highest bid for Lorong 1 Toa Payoh was $1,360psf ppr, whilst top bids for Pine Grove (parcel b) and Clementi Avenue 1 were $1,223psf ppr and $1,250psf ppr, respectively.

CBRE said the bid prices for the latest GLS tender "signal largely cautious optimism for the private residential market, with largely stable end-selling prices, while selected undersupplied markets like Toa Payoh could still see some upside in the future."

"Year to date, developers continued to display low-risk appetites, preferring ECs which are less affected by cooling measures, and those with differentiating factors such as proximity to transport nodes, good schools and limited competing supply," CBRE added.

Huttons, for its part, said the growth in prices in the property market in 3Q 2023 and the strong crowd turnout at the project launches in Nov 2023 may have led to an increase in confidence among developers, resulting in the strong bid prices for the three GLS sites.

PropNex, meanwhile, highlighted the "relatively large bid price gap between the top bid and the last bid for each site" which it said was a reflection of " mixed sentiment amongst developers."

"The relatively subdued market sentiment, high financing and construction costs, as well as recent cooling measures, have heightened caution amongst developers, and this has translated to more prudent land acquisition for private residential plots," said Propnex

Looking at the three site's respective bids, CBRE expects the average selling price of units at $2,300psf for Clementi Avenue 1, $2,300psf-$2,400psf for Pine Grove (Parcel B), and $2,400psf-$2,500psf for Lorong 1 Toa Payoh.