Condos Near Lentor Land Sale Site: Potential Upside?

Residential land prices continue to climb as developers bid aggressively for land parcels available in the government land sales programme.

In July, the Urban Redevelopment Authority said it awarded the tender for a Lentor Central site to GuocoLand, which submitted a bid of $784.1 million, or $1,204 per square foot per plot ratio (psf ppr).

At this land price, the market is estimating launch prices at this future development to be around $2,200 psf.

DBS Group, in a market note, said that “given the high construction cost (steel prices have risen plus restriction of labour movements), we estimate breakeven to be $1,900 psf to $2,000 psf, implying that launch prices could be $2,200 psf, assuming a 10% margin”.

In what could only be GuocoLand’s optimistic outlook on private home prices, its winning bid is even higher than the $1,118 psf ppr winning bid for the Ang Mo Kio Avenue 1 private housing plot in May which had elicited much discussion on the ground.
Developers have been very active in bidding activities at government land sales programmes as they seek to replenish their landbanks. This scramble for land comes after cooling measures in July 2018 effectively ground to a halt the previous en bloc cycle.

The Lentor site: a condo development within a landed enclave

Surrounded by landed estate, this 99-year, 17,279.9 square-metre plot with maximum gross floor area of 60,480 sq m is designated for a private housing development with commercial space on the first storey.

The prime selling point of the future project here is its proximity – about 3 minutes’ walk – to the Lentor MRT station on the Thomson-East Coast Line which will open on August 28.

Developer confidence in the site may also stem from the absence of new housing supply in this area.

GuocoLand has said that it envisions a mixed-use, transit-oriented development of 25 storeys with around 600 residences, with future residents enjoying the convenience of ample F&B and retail spaces, including a supermarket and more than 10,000 sq ft of childcare facilities.

Given its location in the Thomson area with its landed homes, it also said future residents will enjoy unblocked views, as well as proximity to nature reserves and parks.

Moreover, the plot is close to established schools such as Presbyterian High School, Anderson Primary School and CHIJ St Nicholas Girls’ School.

Meanwhile, the prospective owners and tenant pool of this area could include local and foreign talents at the nearby offices of NCS, a software company, Apple South Asia, aerospace and electronics company ST Engineering and semiconductor company UTAC, among others.

Prices of neighbouring condos

With the potential launch price of $2,200, one can’t help but wonder if buyers will actually be willing to pay such a price for this area.

To satisfy our curiosity, we checked out how neighbouring condos currently stack price-wise against their future neighbour.

Here are five developments with similar proximity to the Lentor MRT as the future GuocoLand project.

Thomson Grove

Average Selling Price: $1,212
Location: Yio Chu Kang Road
Tenure: Freehold
District: D26 / Ang Mo Kio
Total No. of Units: 116
Completion: 1984

Located beside the Lentor MRT station, this development by Far East Organization has 116 units in 2-4 bedroom layouts spread across several low-rise buildings. Units are more generously sized here compared to new projects and range from 1,000 to 2,894 sq ft.

Latest transactions at Thomson Grove:
– 3BR, 1,485 sq ft for $1.8m ($1,212 psf) in Nov 2020
– 4BR, 2,895 sq ft for $2.68m ($926 psf) in Aug 2019
– 3BR, 1,485 sq ft for $1.0m ($673 psf) in Jun 2019

Far Horizon Gardens

Average Selling Price: $830 psf
Location: Ang Mo Kio Ave 9
Tenure: 99 yrs from 1982
District: D20 / Ang Mo Kio
Total No. of Units: 272
Completion: 1986

This development by Far Horizon Construction Engineering is a 7-minute walk from Lentor MRT station. Completed in 1986, the 272 units here are in 2-3 bedroom configurations measuring 1,152 to 1,948 sq ft. In 2018, owners elected an 11-member collective sale committee.

Latest transactions at Far Horizon Gardens:
– 2BR, 1,195 sq ft for $1.055m ($883 psf) in Jul 2021
– 3BR, 1,389 sq ft for $1.2m ($864 psf) in Apr 2021
– 2BR, 1,152 sq ft for $975k ($847 psf) in Mar 2021

Thomson Grove, a development by Far East Organization, is located beside the Lentor MRT station.

Seasons Park

Average Selling Price: $905 psf
Location: Yio Chu Kang Road
Tenure: 99 yrs from 1995
District: D26 / Ang Mo Kio
Total No. of Units: 390
Completion: 1997

This Pidemco Land development is a 6-minute walk to Lentor MRT. A 99-year leasehold, this project has 390 units in 16-storey buildings. Its 2-4 bedroom layouts are sized from 1,033 to 1,647 sq ft.

Available units
– 2BR, 1,066 sq ft for $1.18 million
– 3BR, 1,292 sq ft for $1.28 million

Castle Green

Average Selling Price: $891 psf
Location: Yio Chu Kang Road
Tenure: 99 years from 1993
District: D26 / Ang Mo Kio
Total No. of Units: 664
Completion: 1997

This Disney castle-looking development is an 8-minute walk away from Lentor MRT. A Castle Green Property project, this comprises 5 blocks of 13-storey buildings, with units in 2-4 bedroom configurations. Its smallest units are 947 sq ft in size while the largest are 1,410 sq ft.

Available units
– 2BRs from 947 sq ft for $920,000+
– 3BR, 1,174 sq ft for $1.3 million

The Calrose

Average Selling Price: $1,275 psf
Location: Yio Chu Kang Road
Tenure: Freehold
District: D26 / Ang Mo Kio
Total No. of Units: 421
Completion: 2007

This project, developed by Best Peak, is only a 4-minute walk away from Lentor MRT station. The 14-year old development’s units are in 2-4 bedroom configurations, ranging in size from 1,098 to 2,554 sq ft.

Available unit:
– 3BR, 2,219 sq ft for $2.38 million

These 5 condo developments are older, yes, but feature units that are at least 1,000 sq ft in size — suitable for buyers who want more space at a certain price and don’t mind the age of the building.

Potential upside?

Yes, there is headroom for price growth amid strong housing demand and bullish buying sentiment as Singapore’s economic rebound gathers pace.

Moreover, collective selling may be back in play soon as developers continue to run down their landbanks. Some of the 5 developments enumerated above have the potential to go en bloc, especially now when accessibility is not a concern anymore.

As for GuocoLand’s future project, we think they will make the quantum affordable and attractive to buyers by offering more compact units.