Sim Lian Group outbids the competition for the Jalan Tembusu GLS site by barely 0.1%

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Grand Dunman amenities

Sim Lian Group emerged at the top of only two bids for the residential private site located at Jalan Tembusu at the time of closing of the auction on 18 July.

Sim Lian’s offer of $828.8 million, or $1,069 per plot per plot (psf per plot ratio) was only $180,000 (0.1%) higher than the $828 million ($1,068 psf per plot ratio) offered through a joint venture formed by two regulated developers, City Developments Ltd (CDL) and Frasers Property.

Grand Dunman amenities tightly held neighbourhood of Tanjong Katong, Dunman Road GLS residence is a once-in-a-lifetime opportunity for homeowners and investors to acquire property in a quintessential environment.

Jalan Tembusu is located from Tanjong Katong Road in prime District 15. This 99 year leasehold site covers an surface of 221,436 sq. ft. with a plot-to-plot ratio gross of 3.5. The site could be developed into a residential development of 800 units based upon the maximum gross floor area (GFA) that is 775,034 square feet.

The site is in opposition to the planned Tembusu Grand by a joint partnership that was formed between CDL as well as MCL Land, which jointly took over this site at the beginning of January in 2022. The price was $768million, or $1,302 per square foot per month.

Eight bids were received on the table at the time of the tender’s closing in January 2022, compared to only two bids on this latest tender.

“The government-sponsored sale of land (GLS) auction demonstrated the cautious attitude of developers in the face of uncertainty in the economy as well as high construction costs and high interest rates,” claims Lee Sze Teck, senior director of research at Huttons Asia. Lee believes that the bigger amount and the higher interest rate may have slowed the quantity of bidders.

The highest bid of $1,069 per square foot ppr from Sim Lian on behalf of Tembusu Grand’s Jalan Tembusu site this time this time will be 17.9% lower than the $1,302 psf per ppr offered by CDL and MCL Land for the Tembusu Grand site as well as 20.8% lower than the $1,350 psf per-square foot ppr awarded from SingHaiyi Group for the private residential development site located on Dunman Road as part of an auction in June 2022.

“The variation in prices of bids could be due to changes in policies pertaining to the floor area harmonisation which was in effect on 1 June 2023 and could result in lower efficiency,” says Justin Quek who is the executive vice-chairman of OrangeTee. Harmonization of floor space results in a reduction of the area that is sold off by approximately 5%.

Tembusu Grand was released over during the week of April 7 and 8 2023. It is estimated that 53.3% or 340 out of 638 units have been snapped for an average cost of $2,465 per square foot during the weekend of launch. As of now the 364 homes (57.2%) have been sold at an average cost of $2,464 per square foot, basing on caveats filed.

Just this week (July 15-16), SingHaiyi launched the 1,008-unit Grand Dunman, located in the Dunman Road site it purchased in June 2022. The developer sold 554 (54.6%) units at an average of $2500 per sq ft.

Sim Lian’s maximum price of $1,069 per sq ft per pound in The Jalan Tembusu site gives the developer greater flexibility in selling prices, according to Leonard Tay, head of research at Knight Frank Singapore. “The potential selling price for the homes at Jalan Tembusu site when it is launched could range at $2,100 per sq ft and range between $2,200 and $2,400 per sq ft,” he estimates.

The Jalan Tembusu site and an executive condominium site located at Tampines Street 62 (Parcel B)were launched for auction on March 14, 2023. The two sites will yield around 1,540 residential units. These are one of the 490 units that were made available through the Confirmed List in the Government’s 1H2023 Land Sales (GLS) Programme. The amount of units made available in 1H2023 is a 17% increase over the 3,505 units that were released in the 2H2022 period.