Three private residential sites at Dairy Farm, Tengah and Bayshore launched for tender, expected to yield 1,915 units

The government has launched three private residential sites for tender, which are expected to yield an estimated 1,915 private housing units. Among them are the maiden private residential plots in Tengah and Bayshore.

The Urban Redevelopment Authority (URA) released details of the three 99-year leasehold sites on Thursday (13 June). They are located along Dairy Farm Walk, Tengah Garden Avenue, and Bayshore Road.

Market analysts interviewed believe that as the government ramps up land supply and developers grapple with headwinds such as elevated construction costs and interest rates, bid prices for these sites are likely to be lower than those of previously sold parcels in their respective vicinities.

Among the three sites, Dairy Farm Walk and Tengah Garden Avenue are on the Confirmed List under the first-half 2024 Government Land Sales (GLS) programme, yielding approximately 540 and 860 residential units respectively.

Tengah Garden Avenue Site Boasts Large Footprint, Top Bid Could Exceed $800 Million

The Tengah Garden Avenue site spans approximately 274,006 sq ft (25,456 sq m) and can be developed into a mixed-use commercial and residential project with commercial space on the ground floor. This also marks the first private residential parcel in the Tengah precinct; the three sites previously tendered there were all Executive Condominium (EC) plots. Developers seeking a first-mover advantage in the area are likely to be keen, particularly as the site is adjacent to the upcoming Hong Kah MRT station and close to Anglo-Chinese School (Primary), which will relocate to the area in 2030.

However, given the site's substantial land size, significant upfront capital commitment and higher development risks, developers may exercise caution.

With limited private residential projects in the surrounding area, the development could see strong pent-up demand, including from buyers whose household incomes exceed the $16,000 ceiling for EC eligibility but who still wish to reside in Tengah.

The site is projected to draw up to three bids, with the top bid ranging between $740 million and $806 million, translating to $900 to $980 per square foot per plot ratio (psf ppr). Justin Quek expects the site to attract two to four bids, with the highest tender price coming in between $850 and $950 psf ppr.

Dairy Farm Walk Site Less Appealing, Top Bid Could Reach $470 Million

The other parcel at Dairy Farm Walk occupies a land area of about 235,534 sq ft (21,882 sq m), with a portion zoned for low-rise developments of four to six storeys.

This site is relatively less attractive due to its distance from the MRT station. Furthermore, several new launches have entered the precinct over the past few years, so developers will be mindful of the unsold housing inventory nearby. It is expected to draw one to two bids, with the top offer hovering between $435 million and $470 million, or $880 to $950 psf ppr.

High-floor units facing north will enjoy unblocked panoramic views towards the Chestnut Avenue enclave; the plot could attract up to three bidders, with the highest bid estimated at $800 to $850 psf ppr.

Reserve List Site at Bayshore Road With Sea Views Has High Chance of Being Triggered

The third parcel along Bayshore Road is placed on the Reserve List, available for developers to apply to trigger for tender. Spanning about 112,955 sq ft (14,939 sq m), it can yield an estimated 515 units.

Despite cautious developer sentiment, the site stands a high chance of being triggered. Located close to the MRT station and within easy reach of the Central Business District (CBD), it holds strong appeal for both owner-occupiers and investors.

The last land parcel sold in the immediate vicinity was in 2016, which is now Seaside Residences. Excluding Seaside Residences, other sea-facing developments in the area are at least 27 years old, pointing to substantial pent-up demand.

Plots offering sea views and direct MRT connectivity are few and far between. If the site is triggered, the top bid is projected to fall between $900 and $950 psf ppr.

The tenders for Dairy Farm Walk and Tengah Garden Avenue will close at 12 noon on 14 January 2025.