Commentary on the tender closing of Dairy Farm Walk and Tengah Garden Avenue

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

As expected, developers continued to display cautious selectiveness, with lukewarm participation observed at the first URA tender closings for 2025 on 14 Jan 2025 for the residential site at Dairy Farm Walk (540 units) and residential with commercial at first storey site at Tengah Garden Avenue (860 units). This follows the robust showing at new launches in Q4 2024 on the back of pent-up demand amid lower interest rates and economic recovery which brought the preliminary 2024 tally of new developer sales to 6,472 units, marginally higher than 2023’s 6,421 units. Despite the pickup in buying sentiment, developers are likely to remain selective in view of more attractive upcoming sites under the GLS programme, heightened construction costs and financing costs, and harmonisation of Gross Floor Area since the last launch.

Dairy Farm Walk

The plot at Dairy Farm Walk (540 units) drew 2 bids, which is within expectations, but the top bid price of $504.52 mil or $1,020 psf ppr is above expectations and submitted by a consortium between Santarli Construction, Apex Asia, Soon Li Heng and Kay Lim Holdings. 

This land rate is 4% above the adjacent site (which was later launched as Botany at Dairy Farm) which drew 7 bids at the top bid of $371 mil or $980 psf ppr in March 2022. 386-unit Botany at Dairy Farm has sold 98% or has just 6 units left as of end-Nov 2024, since it was launched in March 2023.

At a unit price of $1,020 psf ppr, it is 23.1% higher than the second bid placed by Sim Lian Group which is developing Botany at Dairy Farm.

We believe that the developers have been encouraged by the near sell-out at Botany at Dairy Farm and lack of new supply in the vicinity. Botany at Dairy Farm sold 160 units in 2024 at a median price of $2,012 psf. The new development could potentially be launched at prices starting from $2,200 – 2,300 psf. 

Tengah Garden Avenue

The plot at Tengah Garden Avenue (860 units) drew 3 bids and a top bid price of $675.00 mil or $821 psf ppr, within our expectations. The top bid was submitted by a tie-up between Hong Leong Holdings, CSC Land Group and GuocoLand. There seems to be consensus for the site, with all 3 bids tightly-bundled within 1% difference between the top and lowest bid.

Despite the site’s attractive location in front of the future Hong Kah MRT, the new ACS Primary does not fall in a 1km radius from the plot which could be the reason for the more measured bid interest. The last few sites tendered in Tengah were all EC plots which have seen 4,7 and 9 bids with bid prices of $603-703 psf ppr across 2021 and Feb 2024. Novo Place which is the latest launched EC, has sold 88% of its 504 units at an average price of $1,656 psf. 

At a top bid price of $821 psf ppr, the future average launch price for this Tengah Garden Avenue site could average $2,000 psf.