CDL, Frasers and Sekisui bid $1,360 psf ppr for Toa Payoh site
Property giants City Developments Ltd (CDL), Frasers Property and Sekisui House have jointly submitted the highest bid of $968 million for the 1.57ha Government Land Sales (GLS) site at Lorong 1 Toa Payoh. This translates to a land rate of $1,360 psf per plot ratio (ppr).
According to a statement from CDL, the joint venture is a 50:25:25 split between CDL, Frasers Property and Sekisui House. The joint venture’s bid is 18% higher than the next highest bid of $819.99 million ($1,152 psf ppr) submitted by CapitaLand Development.
The tender for this GLS site was batched with two other GLS sites — one at Clementi Avenue 1 and another at Pine Grove (Parcel B). The land parcels at Lorong 1 Toa Payoh and Pine Grove (Parcel B) attracted three bids each, while the land parcel at Clementi Avenue 1 attracted six bids.
Leonard Tay, head of research at Knight Frank Singapore, notes that despite the seemingly lower participation rate compared to the GLS tenders in 2022, “developers were willing to place bullish bids in order to secure top position”.
It has been eight years since the last GLS site was tendered in Toa Payoh — which was a neighbouring land parcel that has since been developed into Gem Residences by Gamuda Land and Evia Real Estate. When that GLS site was awarded, it attracted a winning bid of $345.86 million ($755 psf ppr).
CDL, Frasers Property and Sekisui House say that if they win the tender for the Lorong 1 Toa Payoh site, they intend to develop a residential project comprising two blocks of 40 storeys with close to 800 residential units.
According to Mohan Sandrasegeran, head of research and data analytics at SRI, the appeal of the GLS site, at the junction of Lorong 1 and Lorong 4 Toa Payoh, is “evident” given its mature residential location and the dearth of new project launches in the area.
Moreover, the site is close to Braddell MRT Station, which is one stop from Bishan MRT Interchange on the North-South and Circle Lines.
Toa Payoh has also generated several million-dollar HDB resales in recent years, says Sandrasegeran, noting that the estate has seen 49 such transactions in the first 10 months of this year. “This reflects a promising pool of potential HDB upgraders within the estate, adding to the potential demand outlook for the upcoming development on the site,” he adds.
However, some market watchers had anticipated more bids for the site. Justin Quek, deputy CEO of OrangeTee&Tie, says that the number of bids was below expectations, although the top bid exceeded its initial estimations. “Some developers could have been cautious about the large size of this land parcel and may prefer to consider smaller plots of land in future land sales exercises,” he says.
Wong Siew Ying, head of research and content at PropNex Realty, echoes this sentiment. “We had anticipated this site to appeal to more developers since it is relatively well located,” she says, adding: “Perhaps the larger development size and higher quantum for this plot have deterred some developers from entering the fray even though this plot has superior attributes.”
She believes the average selling price for the new project may range between $2,400 psf and $2,500 psf.