The tender for the government land sale (GLS) site at Pine Grove (Parcel B) closed on Nov 7 with three bids, with the highest of $692.388 million coming from a joint venture between Sinarmas Land and MCL Land. The bid price of $692.388 million translates to $1,223 psf dp per plot ratio (psf ppr), which is 23.8% higher than the second-highest bid of $988 psf ppr.
The neighbouring Parcel A also drew five bids at the close of its tender last year, with the highest bid of $1,318 psf submitted by UOL and SingLand. The unit launch of Pinetree Hill – a 520-unit project – followed in mid-July, and since then 152 units (29.23%) have been sold at an average price of $2,388 psf.
With the 3Q2023 Rest of Central Region (RCR) having the lowest number of uncompleted and unsold residential units since 4Q2021 (4,470 units), developers recognised the opportunity to replenish their land banks. This is likely what motivated the multiple bids received for the Parcel B tender, and the fact that the winning bid is the lowest out of the three sites tendered for today – Clementi Ave 1 and Toa Payoh Lorong 1 having bids of $1,360 psf ppr and $1,250 psf ppr respectively – further supports this.
The 99-year leasehold site at Parcel B has a maximum gross floor area of 566,003 sq ft, with an estimated capacity to develop 565 units. From research gathered, it is expected that the average selling price of the new condo will be around $2,300 to $2,400 psf.
Sinarmas Land is a Singapore-listed real estate developer and a subsidiary of Indonesia’s largest conglomerate, Sinar Mas Group. This joint venture, should they win the site, will mark Sinarmas Land’s first residential development in Singapore. MCL Land, a member of the Jardine Matheson Group, has developed many residential projects in Singapore and Malaysia.
Given the competing supply right next door at Pine Grove (Parcel A), the lukewarm response is perhaps expected. Potential developers may have been discouraged from participating, as UOL and SingLand might have aimed to defend the pricing of their Pinetree Hill project and bid for the site.
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Justin Quek, deputy CEO of OrangeTee & Tie, noted that despite this, there may still be enough demand to absorb the additional supply of homes in the area, with a sufficient time gap between the launch of Pinetree Hill and the project at Parcel B.
The Pine Grove Parcel B tender marks the third GLS site to close today, and with the bids having been substantially higher than the reserve prices, and the bids for the other two sites being much higher than that of Parcel B, developers are clearly prepared to pay for premium land amidst a recovering market.