Tender launched for GLS sites at Clementi Ave 1 and Pine Grove
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with lush greenery amidst city livingCautious bidding is expected for the two Government Land Sales (GLS) sites at Clementi Avenue 1 and Pine Grove (Parcel B), despite their convenient locations in relation to amenities.
Lee Sze Teck, senior director of data analytics at Huttons Asia, notes that the economic uncertainty and high development costs are causing developers to become more cautious when considering GLS tenders. He adds that, due to the close proximity of the two sites, there is a chance of an overlap in residential catchment areas which could affect take-up rates.
Those developers who need to replenish their landbanks may be more inclined to bid for these GLS sites. The Clementi Avenue 1 site is situated between two recent developments, The Clement Canopy and Clavon, both UOL Group projects. In December 2015, the developer was awarded the Clementi Canopy site at a land rate of $615 psf per plot ratio (ppr), and the Clavon site in July 2019 at $788 psf ppr.
Justin Ong, deputy CEO of OrangeTee & Tie, believes that when the Clementi Ave 1 site is built, it will still be attractive to homeowners, especially those with school-going children due to the abundance of nearby educational institutions. He believes that, given the land cost and the fact the site can yield around 500 units, there will be high demand from developers.
Meanwhile, the Pine Grove (Parcel B) site is near the 520-unit Pinetree Hill project by UOL Group, which was launched in July. Pinetree Hill has sold 151 units at an average of $2,369 psf.
Wong Siew Ying, head of research and content at PropNex Realty, expects more cautious bidding for the Pine Grove site due to the competition from the Pinetree Hill project. Her estimates suggest that it could attract up to three bids, with the top bid coming in at around $623 million to $679 million, which translates to a land rate of $1,110 psf ppr to $1,200 psf ppr.
The tender for both sites will close on 7th November and will be batched with an upcoming residential site at Lorong 1 Toa Payoh, under the 2H2023 Confirmed List. This will be released next month.
Given the attractive locations of the two GLS sites, developers are expected to bid for them. However, due to the economic uncertainty and the competition from nearby developments, their bids could be more cautious. The tender for these sites will close in November, and will coincide with the tender for the Lorong 1 Toa Payoh project.