THE latest state tender closing in the Upper Thomson area showed developers sitting out land sales as caution prevails in the market.

The site drew just one bid – a joint venture between GuocoLand and Hong Leong Holdings, with an offer of around S$780 million or S$904.60 per square foot per plot ratio (psf ppr). 

The sole offer came in just under expectations polled by The Business Times before the tender closed on Thursday (Apr 4). Consultants had expected the plot to fetch three to five bids, with the highest bid ranging between S$1,000 and S$1,100 psf ppr. 

The land rate is also 8 per cent lower than that of Lentor Central. The site was awarded in September 2023 to a joint venture between Hong Leong Holdings, GuocoLand and China Construction (South Pacific) Development Co for S$435.2 million or S$982 psf ppr. 

While site-specific requirements may have deterred some players, winning the Upper Thomson plot would give “a head start in an emerging area that is predominantly a landed housing precinct”, said Chia Siew Chuin, head of residential research, Singapore research and consultancy at JLL.

Chia added: “The consortium’s tender participation is likely driven by its defensive strategy to maintain a strong foothold in the area extending beyond the Lentor neighbourhood. This provides them the chance to better manage sales and pricing of their projects. Excluding this subject site, GuocoLand is developing 2,211 units in the Lentor district.”

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Wong Siew Ying, PropNex head of research and content, noted that existing supply of unsold units is around 1,200 units in various projects in the new Lentor Hills estate, where six plots have been sold so far and five projects launched. 

There is also a second site on Upper Thomson Road on offer, said OrangeTee & Tie chief executive Justin Quek. Parcel A, an adjacent state land plot that is currently up for tender, can yield 640 units, including 100 long-stay serviced apartments.

Given the bid of S$905 psf ppr for the site, analysts expect the Upper Thomson (Parcel B) project to be launched between S$2,000 and S$2,200 psf.

“If the launch price is palatable, this project can be attractive to local homebuyers looking to downgrade from landed housing in the Springleaf vicinity, as well as the HDB upgraders from the Ang Mo Kio and Yio Chu Kang estates,” said Leonard Tay, Knight Frank’s research head.

The Upper Thomson Road (Parcel B) plot spans 32,023.7 square metres (sq m), to yield 940 units.

Nearby, the 99-year leasehold The Essence condominium in Chong Kuo Road was launched in March 2019. The median price of new sales at The Essence, from its launch till today, is S$1,376 psf. The development was built on a site awarded in 2018 for S$43.95 million or S$681 psf ppr. 

The most recent transaction – a sub-sale – was for a 818 square feet unit which changed hands in January at S$1.3 million or S$1,638 psf.