URA launches GLS site at Bayshore Road: Commentary by ERA

SINGAPORE, 26 November 2024 – The tender for the Government Land Sale (GLS) sites at Bayshore Road launched on 26th November 2024. The site can potentially yield about 515 units. The tender for sale will close at 12 noon on 18 March 2025.

Plum Location Slated for Future Development

Residents of the Bayshore area have direct access to major roads such as ECP which directly connects the OCR area to central Singapore with a 15-minute commute time. The site will also be the first development to be integrated with Bayshore MRT station, such that residents will have seamless access to the Thomson East-Coast Line (TEL).

Families with children may appreciate the site’s convenient location in proximity to a variety of educational institutions offering primary to tertiary education within a 1 to 2km radius. This includes schools such as Temasek Primary School, Temasek Secondary School and Temasek Junior College.

The Bayshore area has been highlighted as one of Singapore’s upcoming townships, buoyed by The Bayshore Masterplan. Development is set to enhance overall connectivity and improve on the availability of amenities in the area for residents, both existing and new.

Additional cycling networks will be developed in-line with the government’s vision to develop a car-lite neighbourhood, while connecting Bayshore with Round Island Route and the upcoming corridor from East Coast Park to Changi Beach.

Furthermore, some units at the Bayshore Road site could have unobstructed sea views given that a segment of the development faces East Coast Park.

Demand from HDB Upgraders, Older Condo Homeowners and Right-sizers from Nearby Landed Enclaves

With the Bayshore area being largely undeveloped since existing projects launched more than two decades ago, the addition of 515 of an estimated 3,000 new private homes leads major initiatives in revitalising the area.

Current residents of older projects nearby could be familiar with the area, and are likely to upgrade to a unit the Bayshore Road site. They can benefit from refreshed leases and owning a brand-new home in the area.

The site could also potentially attract HDB upgraders given that an estimated 2,012 flats will also fulfil their MOP within the next two years. The median price of 5-room and 4-room flats of less than 15 years transacted in Bedok at $976,500 and $815,000 respectively from January 2024, which could contribute to the down payment for a new home in Bayshore.

The site is also in proximity to numerous private landed housing enclaves, such as the Kew and Sennett Estates. Demand could come from the sizable population of landed home owners, with older owners seeking to right-size their homes, or from larger families who want to live in the same project.

The last new launch at Siglap Road (Seaside Residences) in April 2017 saw 70% of the released units sold at launch. With 60% of the buyers identified from the East, the new launch with an attractive location and pricing highlights the pent-up demand in the area.

Few GLS sites and Failed En Bloc Deals Due to Older Developments’ Size

The last GLS site along East Coast Parkway at Siglap Road (Seaside Residences) was awarded at $624 mil ($858 psf ppr) to the highest of eight bids in 2017. The site’s premium location boasting the unique characteristic of sea views could have attracted developers to contend for the site.

Given the slow supply of GLS sites in the area, new developments could come from en bloc deals instead.

Older condos along East Coast Parkway have significant en bloc potential, however, they could be unsuccessful due to the development’s large size. Previous en-bloc efforts of Laguna Park have failed, with the most recent tender in 2019 at $1.48 billion closing with no applicants.

Mandarin Gardens had also failed to secure the required 80% threshold. A successful en bloc launch of the development could have seen reserve price of $2.88 bil ($953 psf ppr).

Multitude of Opportunities to be Leveraged on by Developers

 The Bayshore Road site marks the first GLS site in Bedok since 2020 and Bayshore area since 1997, highlighting the scarcity of new private residential homes. Given its prime location next to an MRT station, developers could be more willing to fork out a premium to secure the attractive site.

Additionally, Bayshore Road site is one of the more attractive sites on the 2024 GLS Confirmed List. Having observed lukewarm responses for previous sites, developers could have withheld bids to attempt competing for Bayshore.

The palatable size of the development could also be an attractive attribute for smaller developers, which they can leverage on to place competitive bids with lower risks.

Strong indication of homebuyer optimism could also translate to developer confidence in future GLS performance. The wave of new launches in November garnered overwhelming reponse, as Emerald of Katong achieved a record-high with 99% of the development sold, along with Chuan Park with 76% sales during its launch weekend.

Lastly, Bayshore forms one of the three upcoming townships alongside Holland Plain and Kampong Bugis. Thus, the Bayshore estate can also draw similarities to the township development in Lentor. New launches in Lentor have consecutively set the bar for future launch prices. It will be in the developers’ best interest to leverage on first-mover advantage in penetrating the market for private residential homes in Bayshore.

Strong Competition Between Developers to be Expected

Despite headwinds faced by developers in the market, the Bayshore site could be the land parcel many developers have been waiting for this year. Thus, we can expect the bidding competition to be set abuzz with around four to six bids.

\While we do not expect bid prices to be too excessive, developers’ confidence to compete for the site could prevail. Hence, bid prices may range from $1,050 and upwards, translating to a land price of at least $500m.

END OF PRESS RELEASE

For media enquiries, please contact:

Eugene Lim, Key Executive Officer, ERA Singapore

Email: [email protected]