CBRE commentary on tender closings for Residential sites at Clementi Avenue 1, Pine Grove (Parcel B) and Lorong 1 Toa Payoh

By Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE

The tender closings for the URA sites at Clementi Avenue 1, Pine Grove (Parcel B) and Lorong 1 Toa Payoh were largely within our expectations. The 3 to 6 bids received for these three sites have been well within the 1 to 6 bids for the non-EC private residential land tenders so far this year, significantly lower than the 7-9 bids for the EC tenders. The little surprise came from the Lorong 1 Toa Payoh site which saw fewer bids than expected, but with a top bid price of S$1,360psf ppr that was 13% above market expectations. The Clementi Avenue 1 site received a decent 6 bids with a top bid price of S$1,250psf ppr which is slightly higher than expected. Pine Grove (Parcel B) received 3 bids with a top bid price of S$1,223psf ppr, 7% lower than next-door Parcel A, which was awarded in Jun 2022 to the top bidder, UOL, for S$671.5 mil or S$1,318psf ppr, among 5 bidders. The bid prices signal largely cautious optimism for the private residential market, with largely stable end-selling prices, while selected undersupplied markets like Toa Payoh could still see some upside in the future. Year to date, developers continued to display low risk appetites, preferring ECs which are less affected by cooling measures, and those with differentiating factors such as proximity to transport nodes, good schools and limited competing supply.   

Clementi Avenue 1 
The Clementi Avenue 1 site received a decent 6 bids with a top bid price of S$1,250psf ppr which is just 4% higher than the second highest bid. 

This Clementi Ave 1 site is in between two earlier tendered sites which are now Clavon and The Clement Canopy. Clavon was awarded in Jul 2019 to the top bidder --a JV between UOL and UIC for S$491.3mil or S$788 psf ppr, among 5 bids. Clavon sold 74% of its total 640 units at a median price of S$1,637 psf in its launch month of Dec 2020. It was fully sold by Sep 2022 with prices hitting over S$1,700psf by then. Clementi has been relatively popular with its proximity to tertiary institutions and international schools, while not that near MRT stations. 

At the top bid price of S$1,250psf ppr, we expect the developer could launch at an average selling price of S$2,300psf. 

Pine Grove (Parcel B) 
The Pine Grove (Parcel B) site drew 3 bids, with a top bid of $1,223 psf ppr from MCL Land, which is 24% higher than the second highest bid of S$988psf ppr from UOL. Still, the top bid price is below that at next-door Parcel A, which was awarded in Jun 2022 to the top bidder, UOL, for S$671.5 mil or S$1,318psf ppr, among 5 bidders. Parcel A was recently launched as 520-unit Pinetree Hill in July and has sold 150 units or 29% at a median price of S$2,360psf in its first month of launch. 

At the top bid price of S$1,223psf ppr, we expect the developer could launch at an average selling price of S$2,300-2,400psf. 

Lorong 1 Toa Payoh 
This is the first time in eight years a land parcel in Toa Payoh is being offered to private developers. The last site sold earlier was built into Gem Residences (578 units), which was completed in 2020, and has transacted in the secondary market at an average price of $1,841 psf in 2023 so far. Given Lorong 1 Toa Payoh’s walking distance to Braddell MRT, within 1km radius to popular Pei Chun Primary School, and likely pent-up demand in a mature HDB estate, we had expected the site to draw the strongest interest from developers among the 3 tenders. However it drew just 3 bids, probably due to its larger size (775 units). Nonetheless, the top bid price of S$1,360psf ppr from a CDL/Frasers Property/Sekisui House JV is 13-24%% higher thanthe  market-expected S$1,100-1,200psf, and also 18% higher than the second highest bid from CapitaLand. 

At the top bid price of S$1,360psf ppr, we expect the developer could look to launch at an average selling price of S$2,400-2,500psf.

Tender results for Clementi Avenue 1 (from confirmed list H2 2023)
Award date: TBC
Launch date: 15-Aug-23
Close date: 7-Nov-23
Land use zoning: Residential
Site Area: 13,451 sqm / 144,788 sf
Gross Plot Ratio: 3.5
Permissible Gross Floor Area:  47,079 sqm / 506,758 sf
No. of units: 500
Lease Period: 99y







Tender results for Lorong 1 Toa Payoh (from confirmed list H2 2023)
Award date: TBC
Launch date: 5-Sep-23
Close date: 7-Nov-23
Land use zoning: Residential
Site Area: 15,743 sqm / 169,458 sf
Gross Plot Ratio: 2.1
Permissible Gross Floor Area:  66,121 sqm / 711,726 sf
No. of units: 775
Lease Period: 99y





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