A PLOT of state land in Toa Payoh is expected to attract firm, but cautious bidding from developers when it goes up for tender in November.

The 5,743 square-metre site in Lorong 1 Toa Payoh can yield about 775 housing units, with a maximum gross floor area of 66,121 sq m.

It was moved from the reserve list of the government land sales (GLS) programme in the first half of 2023 onto the confirmed list for the H2 2023 schedule. (Sites on the confirmed list are launched for sale at set dates and mostly sold through tenders. Sites on the reserved list, on the other hand, are not released for tender, but are instead made available for application, or when there is demand for them.)

PropNex Realty head of research and content Wong Siew Ying said developers will be drawn to this site because of the limited new private home supply in the area and the appeal of Toa Payoh as a mature estate.

Nevertheless, developers may exercise caution and show restraint in light of the lukewarm response to recent GLS tender closings, the slower take-up rate at launches and plenty of options for buyers in the market, she said. 

However, she expects interest for the site to remain decent, and said the tender could attract between four and five bids, with the top bid price at between S$783 million and S$854 million (or a land rate between S$1,100 and S$1,200 per square foot per plot ratio). 

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Analysts generally expect pent-up demand for new homes in Toa Payoh to be strong, as was the case for the last GLS site, the 578-unit Gem Residences, launched eight years ago. The project sold 50 per cent of the units at an average price of S$1,425 per square foot at its launch in May 2016, with the land originally awarded for S$345.86 million (or a land rate of S$775 per square foot per plot ratio). 

“Looking at caveat data at Gem Residences, more than 50 per cent of the new launch buyers had a Housing and Development Board (HDB) address, suggesting strong upgraders’ demand for this neighbourhood,” noted PropNex’s Wong.

Another nearby project, Trevista, was launched in 2009 and had similarly sold more than half at launch, which “is a testament to the popularity and attractiveness of Toa Payoh in the eyes of buyers”, said Huttons Asia’s senior director for data analytics, Lee Sze Teck.  

HDB resale flats that are below 20 years old in Toa Payoh transacted at a median price of S$855,000 in the first six months of 2023, noted Justin Quek, deputy chief executive officer of OrangeTee & Tie. 

“This may support the upgrading aspirations of homeowners in Toa Payoh, who may look to upgrade within the same neighbourhood,” he added.

The tender for the Lorong 1 Toa Payoh site closes on Nov 7. The tender closing will be batched with two residential sites – one in Clementi Avenue 1, and the other, Pine Grove (Parcel B). Both were launched last month.