Kheng Leong and Low Keng Huat have successfully secured the winning bid of $279 million for a residential government land sale (GLS) site at Canberra Crescent GLS. The land rate is calculated at $793 per square foot per plot ratio (PPR). The site measuring 219,985 square feet received a total of three bids.
A consortium of companies, including Santarli Realty, Apex Asia Real Estate Holdings, BHCC Construction, and Heeton Holdings, submitted the second highest bid. The consortium submitted a bid of $275.09 million, which is only 1.4% below the highest bid.
Meanwhile, another bid was received from GuocoLand, who submitted a bid of $228.77 million for the GLS site.
Considering the current state of the market with cautious buyers, the fact that there are three bidders suggests a significant level of competition. According to Marcus Chu, CEO of ERA Singapore, developers in Canberra are expressing genuine concern over rising development costs.
According to Wong Siew Ying, head of research and content at PropNex Realty, the top bid land rate of $793 psf ppr is not meeting her expectations. If the site is awarded, it would be the lowest land rate for an Outside Central Region (OCR) GLS site (excluding Executive Condo sites) since 2020.
According to her analysis, the upcoming development may have an average selling price of over $1,850 per square foot (psf). This would be slightly lower than the average price of recent new launches in the OCR, which have been hovering around $2,100 psf.
Meanwhile, Chia Siew Chuin, the head of residential research, research & consultancy at JLL, highlights that GuocoLand’s bid price of $228.77 million is 22% lower than the highest bid. “This highlights the difference in perspectives among developers, and the cautious bids reflect their decreased willingness to take risks and their opportunistic approach in light of the current challenging market conditions marked by higher costs, greater risks, and a decline in new home sales,” she explains.
The site at Canberra Crescent is located at the intersection of Canberra Street and Canberra Crescent in District 27. Based on the data provided, it appears that the site has a gross plot ratio of 1.6 and the potential for a maximum of 375 units in the new development. This location is in close proximity to Bukit Canberra, a comprehensive sports and community hub that offers various amenities such as a hawker centre, a swimming pool, and an indoor sports hall.
The land rate of $793 psf ppr submitted by Kheng Leong and Low Keng Huat for the GLS site at Canberra Crescent exceeds the $644 psf ppr offered by JBE Holdings when it won the tender for a 143,326 sq ft site along Canberra Drive in 2020. The land rate results in a total price of $129.2 million.
This site at Canberra Drive which is The Commodore, a 219-unit project that was launched in November 2021. The development was completely sold out in June of last year, with an average selling price of approximately $1,400 per square foot.
Adjacent to The Commodore is another GLS site on Canberra Drive, currently undergoing development by UOL Group to create The Watergardens at Canberra, a 448-unit residential complex. In 2020, UOL successfully secured the 296,722 sq ft plot by submitting the winning bid of $270.2 million ($650 psf ppr).
The Watergardens at Canberra was launched in August 2021 and was completely sold out by March 2023, with an average selling price of $1,686 per square foot.
Chu also highlights that the highest bid from Kheng Leong and Low Keng Huat falls around 12.4% to 14.0% below the winning bids for recently-awarded GLS sites in the North region, like Champions Way ($904 psf ppr) and Upper Thomson Parcel B ($905 psf ppr).
Potential of Canberra Crescent GLS Site
According to Justin Quek, CEO of OrangeTee & Tie, the Canberra Crescent GLS site is a desirable size for developers who want to expand their land bank without taking on excessive risk. He predicts that there will be a strong demand for new private residential units in this area, considering that The Commodore and The Watergardens at Canberra have already been completely sold out.
“No other land parcels are currently available for sale in the near future following the announcement of the 2H2024 GLS programme.” According to Quek, there is potential for sustained sales at this location when the future project launches due to pent-up demand.
Also worth noting: GLS sites at Dairy Farm Walk and Tengah Garden Ave have been launched for sale, while the Bayshore Rd site is now open for application.
According to Chu, the lack of upcoming new launches in the North might be the reason why developers are eager to bid for the site, except for Champions Way and Upper Thomson. Canberra Crescent stands out as an appealing option for those interested in addressing the shortage of non-landed private housing, thanks to its relatively low competition.
