Commentary on GLS tender closing of Margaret Drive and Jalan Loyang Besar

Margaret Drive
The plot at Margaret Drive (460 units) drew 2 bids at the lower end of expectations and a top bid price of $497.00 mil or $1,154 psf ppr in line with expectations, submitted by a joint venture between Hong Leong Holdings and GuocoLand. 

Despite being the first GLS site in the area sold since 2017, its palatable size and attractive location near MRT in the mature Queenstown residential estate; the site saw muted developer participation. Comparatively, the last site in the vicinity at Stirling Road (launched as Stirling Residences) drew 13 bids and was awarded in May 2017 for $1.003 bn ($1,051 psf ppr) to a joint venture between Hong Kong-listed developer Logan Property Holdings and Chinese developer Nanshan Group. Another site on Margaret Drive (launched as Margaret Ville) drew 14 bids and awarded in Dec 2016 for $238.4mil ($998 psf ppr) to MCL Land.  

At a top bid price of $1,154 psf ppr, we believe the developer would take cue from the launch prices of recent city fringe projects, with the proposed development potentially achieving an average launch price of $2,500 – 2,600 psf. By trading comparables, Margaret Ville has seen 8 resale units at a median price of S$2,151psf in 2024. Demand at its eventual launch could likely be supported by a ready pool of HDB upgraders in the neighbourhood, especially with the median price of 4BR HDB flats in Queenstown for Q1 2024 at $897,500 and recent media reports of the record sale of a 5-room HDB flat at Margaret Drive for $1.73 mil.

Jalan Loyang Besar (EC)
The EC plot at Jalan Loyang Besar (710 units) drew a lacklustre 4 bids and a top bid price of $557.00 mil or $729 psf ppr, in line with our expectations. The top bid was submitted by a consortium between Qingjian Group, China Communications Construction Co. and ZACD Group. There seems to be some consensus between the top two bids as the top bid is just 3.4% higher than the second bidder’s $705 psf ppr. 

With a top bid unit price of $729 psf ppr, this is a new record land rate for EC plots, higher than the last high of $721 psf ppr recorded for Tampines Street 62 Parcel B which was awarded to Sim Lian Group on 9 Oct 2023. Developer participation for Jalan Loyang Besar pales in comparison to the Tampines Street 62 Parcel B which drew 7 concepts at the closing of its concept and price tender, indicative of heightened developer caution. The recent EC plot at Plantation Close also drew just 4 bids. However, the firm pricing continues to reflect developers’ confidence in the EC market as the segment is generally not as affected by the recent property cooling measures due to the higher proportion of owner-occupiers and first-time buyers. There is also a limited supply of new EC units in the market, and developers are seeking a less risky development site to add to their inventory.