Faber Walk GLS Site Closing on November 2024: Commentary by ERA

SINGAPORE, 19 November 2024 – The tender for the Government Land Sale (GLS) site at Faber Walk closed on 19^th November 2024. In total, the site drew interest from three bidders, with the top bid of $349.9 million (or $900 psf ppr) submitted by a consortium, consisting developers GuocoLand (Singapore) Pte. Ltd., TID Residential Pte. Ltd. And Intrepid Investments Pte. Ltd.

Here is the list of all parties who participated in the bidding process for the GLS site:

Developers Continue to Take a Cautious Stance Towards the Market

The highest bid $349.9m ($900 psf ppr), portrayed a difference of 8.8% compared to the second highest bid of $321.3 mil ($827 psf ppr). We had initially anticipated bid prices to exceed $950 psf ppr. However, the outcome revealed a more measured market view, likely because the site is not in an established mass-market housing estate.

With three bids received for this site, response from developers falls short from previous bidding activity for sites near Faber Walk

Previous sites in the area received strong responses from developers, with an overwhelming number of 18 bidders for Waterfront @ Faber in 2014, and an average of seven bids across the sites for Parc Riveria, Twin View and Whistler Grand in subsequent years.

The bid price for the Faber Walk site comes 12.5% higher than that of Whistler Grand, the last GLS site in the area awarded at $472 mil ($800 psf ppr).

Future Project Could be a Premium Product

With its location in the vicinity of the Faber Walk landed enclave, the future development could be marketed as a premium project, targeted at the landed enclave. Given the plot ratio, it is likely to be constructed as a low-rise, low-density project of about 400 units with a large, regular-shaped plot. The development will hold views over the nearby landed estate, and the Pandan River.

This is supported by the likely demographic of buyers, who are likely to come from the nearby landed estate, purchasing units as a means to right-size their assets while still staying within the same, familiar environment.

Those who grew up living in the estate might also consider buying into this project to have their own property and space, while being within a comfortable distance to take care of their parents.

This is further compounded by the fact that there is no nearby HDB estate to create demand for the project as an upgrading product.

Muted number of bids received Amidst a Saturated Market

As a result, the site could have been perceived as one that does not have the mass market appeal of other sites on the 2H 2024 GLS Confirmed List such as Bayshore Road and Chuan Grove, resulting in the relatively muted response.

Additionally, nearby amenities such as Ayer Rajah Food Centre and Clementi Mall could serve as key selling points for the project. Similarly, Nan Hua Primary School, potentially within a 1km radius of the site, could further enhance its appeal.

Potential Demand and Pricing

The last residential launch in the area saw two new projects debuting just six months apart in 2018. Twin Vew, launched in May, ended its launch weekend with 85% of the development sold at an average price of $1,399 psf. Whistler Grand subsequently sold 65% at launch with average prices of $1,380 psf.

With recent OCR launches such as Chuan Park seeing median launch prices at $2,580 psf, the developers could take cues from this new benchmark pricing and launch the future project in the similar range, at above $2,500 psf.

For media enquiries, please contact:

Eugene Lim, Key Executive Officer, ERA Singapore

Email: [email protected]