Huttons’ comments on the Lentor Gardens GLS site

4 April 2023

The Lentor Gardens GLS attracted a top bid of $985 psf ppr from one developer. The last GLS site to see only 1 bidder was at Silat Avenue in 2018. This is the lowest bid for a land parcel in the Lentor precinct. The last two bids were above $1,100 psf ppr.

Bidders for sites in the Lentor Precinct have been trending downwards since the first site was sold in 2021. This is probably because developers are mindful of an area where the Government has been pushing out land for sale regularly. There is 1 upcoming GLS site on the Confirmed List and 1 on the Reserve List. Excluding Lentor Modern which has been launched, the area could potentially see almost 3,000 units if the sites are sold.
Developers are slapped with an ABSD of 35% if they are unable to sell all the units within 5 years. This risk can be better managed if developers secure a site where there is less competition. They are facing higher construction costs and interest rates. Moreover the economic outlook is cloudy at the moment. These reasons may have resulted in the lower bid.
It remains to be seen if the Government will award the site as the last two bids were above $1,100 psf ppr. If the Government chose not to award, they may be sending a signal that the land bids for sites in Lentor precinct have to be higher. With higher land costs, that will translate into higher selling prices for buyers in the future.