Commentary on tender closing of commercial-residential site at Tampines Street 94 and Media Circle (SA2) site

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

The overnight oversized rate cut of 50bps in the US may have boosted confidence in the Singapore land sales market, with the two site tender closings today seeing more participation and more optimistic bids than those closed in the prior 10 months. In a nutshell, we expect investment sentiment could improve going forward as funding costs come off, especially if developer sales also pick up on lower mortgage rates.   

Tampines Street 94 Commercial-Residential Site 
The mixed-use site at Tampines Street 94 saw 6 bids, with a top bid of $668.28 mil or $1,004 psf ppr. The last time we saw 6 bids for a single site was for the Clementi Ave 1 in Nov 2023, tender closings after that had received 0-4 bids. The top bid land rate for Tampines Street 94 which came from Hoi Hup and Sunway Development JV, is above market expectations, and also topped the last mixed-use site at Tampines Ave 11, which drew 3 bids and was awarded in July 2023 for $884.6 psf ppr, by 13.5%, probably due to its smaller quantum and lower development risk. 

The Tampines Steet 94 site is near the Tampines West MRT station on the downtown line. The 252,989 sq ft site has a gross plot ratio (GPR) of 2.6x with a maximum gross floor area (GFA) of 665,366 sq ft. The new development could yield 585 residential units, with a commercial GFA of approximately 112,980 sq ft. There is stipulated minimum GFA for a childcare centre (650 sqm), a community plaza (1,500 sqm), supermarket (1,000 sqm) and a food court (1,000 sqm). 

The Tampines Ave 11 mixed-use site, with a site area of 545,511 sq ft and 2.5x GPR, is double the size of Tampines St 94. It drew 3 bids and was awarded to a joint venture between UOL Group, Singapore Land Group and CapitaLand Development in July 2023. The joint venture's winning bid was $1.206 billion or $885 psf per plot ratio (psf ppr). The developer said recently that it will have a retail mall, bus interchange, community club and hawker centre and will be directly connected to the future Tampines North MRT on the Cross Island Line. The upcoming residential development will be called Parktown Residence and will have 1,195 residential units, targeting a Q1 2025 launch.       

We expect the residential projects to be well-received as Tampines town has a lack of private condos near MRT and yet has a large upgraders market with a lot of mature public housing and ECs.  Nearby 99-year leasehold private condo The Tapestry, completed in 2021, has seen healthy demand with 49 transactions in 2024 at a median price of $1,674 psf. We expect new condo projects in Tampines, near MRT stations, could fetch $2,100-2,200 psf.   

Media Circle (SA2) Site
The site at Media Circle at Buona Vista site is the only pure-play long-stay serviced apartment site up for tender and comes with a 60-year lease and is designated for long-stay serviced apartments (SA2), potentially yielding 520 units, with commercial use at the first storey. The only two earlier-launched sites with partial SA2 requirements had met with tepid response -- Zion Road Parcel A received one bid while the more recent Upper Thomson Parcel A had received no bid at all. 

The Media Circle site received one bid from a Frasers-led consortium for $120.089 mil or $461psf ppr. Though it appears to be low, compared to earlier Media Circle site awarded in Feb 2024 to CNQC Realty (Clementi) Pte. Ltd. And Forsea Residence Pte. Ltd for $1,191 psf ppr, the bidder probably has factored in considerations that it is on a shorter 60-year lease tenure and it is a pure-play long-stay serviced apartment which entails different capital requirements, expertise and risks.