MCL Land and CSC Land JV submit highest bid of $1,250 psf ppr for Clementi Avenue 1 GLS site

SINGAPORE (EDGEPROP) – The tender for the residential government land sale (GLS) site at Clementi Avenue 1 closed on Nov 7, together with the tender for the sites at Lorong 1 Toa Payoh and Pine Grove (Parcel B). Clementi Avenue 1 received the highest number of bids among the three sites.

The Clementi Avenue 1 site drew six bids, with the top bid of $633.45 million submitted by a consortium comprising CSC Land Group and MCL Land. This works out to $1,250 psf per plot ratio (psf ppr) for the 99-year leasehold, 178,066 sq ft site. The bid was 4.03% higher than the second highest bid of $608.89 million ($1,202 psf ppr) submitted by a joint consortium of CDL, Frasers Property and Sekisui.

Leonard Tay, head of research at Knight Frank says that the popularity of the Clementi Avenue 1 site over the other two may be due to the fact that it is the smallest of the three plots in terms of gross floor area, and hence has the smallest land cost outlay. He notes that there are now fewer developers taking part in the tender process, with the parcels at Lorong 1 Toa Payoh and Pine Grove Parcel B only attracting three bidders each.

“Sentiment is mixed at the moment with homebuyers taking more time to decide before making a purchase. Elevated interest rates, an uncertain economic outlook and the prohibitive nature of the cooling measures that were announced in April 2023 have also taken a toll on demand momentum,” Tay adds.

OrangeTee & Tie’s deputy chief executive officer, Justin Quek, attributes the healthy competition to the limited project launches in Clementi: “Developers may have been keen to tap on the steady demand for private homes in this area.”

SRI’s head of research and data analytics, Mohan Sandrasegeran, agrees. He notes that the newly-launched private residential developments nearby such as KI Residences At Brookvale, Clavon and Parc Clematis, have seen a good take-up rate.

“When the upcoming Clementi Avenue 1 development hits the market in the near future, KI Residences At Brookvale is expected to have achieved full occupancy. Developers are likely mindful of the gap that will appear as prior projects reach full capacity. This understanding probably prompted them to seize the favourable conditions which likely explains the total of 6 bidders who were vying for this land parcel,” Sandrasegeran adds.

According to ERA Singapore’s key executive officer Eugene Lim, this is the first GLS site situated along Clementi Avenue 1 sold since 2019. “This land parcel is nestled between two condominiums, namely The Clement Canopy and Clavon. The GLS site where Clavon sits was sold in 2019. The condo has been fully sold since it was launched in 2020, and is expected to receive TOP status in 2026.” The Clement Canopy has been fully sold.

Huttons Asia’s chief executive officer Mark Yip says that Clavon sold 70% of its units during its launch day in 2020, while The Clement Canopy sold 80% of released units on the first day of sales in 2017.

ERA’s Lim notes that Clementi is a choice location for both families with school-going children and international students. In addition, the housing demand for Clementi is further driven by its strategic proximity to the neighbouring business parks and nodes in Jurong Lake District, Buona Vista and one-north.

“An estimated 1,500 HDB flats in the Clementi and Queenstown precincts will reach the 5-year Minimum Occupation Period (MOP). Hence, we expect significant demand from HDB upgraders in the neighbourhood precincts for the upcoming projects.”

Based on EdgeProp Singapore’s LandLens, the site enjoys good proximity to established educational institutions, such as Nan Hua High School, New Town Secondary School, NUS High School of Mathematics and Science, Singapore Polytechnic and the National University of Singapore.

Meanwhile, Huttons’ Yip says that the proximity between GLS sites Clementi Avenue 1 and Pine Grove (Parcel B) may have diluted the participation for some developers.

The site is expected to house about 500 residential units. The estimated selling price is expected to be in the range of $2,300 to $2500 psf, according to ERA, while SRI expects a range of $2,400 to $2500 psf.