SingHaiyi Group Secures Dunman Road GLS Site with a Winning Bid of $1.284 Billion

SingHaiyi Group’s Dominant Position in the Dunman Road GLS Tender

SingHaiyi Group has emerged as the highest bidder for the Government Land Sales (GLS) site at Dunman Road, with a winning bid of $1.284 billion, which translates to $1,350 per square foot per plot ratio (psf ppr). This is a significant achievement for the property developer, as the Dunman Road site received just two bids. The runner-up offer, tendered by a group consisting of City Developments Ltd (CDL), TID and Hong Leong Group, amounted to 1,122 per square foot/ $1.067 billion. The name for the development has been released and will be called Grand Dunman. https://thegranddunman.sg/

Market Insights: Developers’ Cautious Approach to Residential Sites

The limited number of bids for the Dunman Road site indicates a cautious approach by developers in acquiring residential sites, particularly larger ones. According to Ong Teck Hui, JLL’s Senior Director of Research & Consultancy, this caution stems from the low unsold inventory and recent successful Piccadilly Grand and Liv@MB launches. In addition, the significant 20.3% gap between the top and second-highest bids reflects a restrained effort to compete by the lower bidder.

This tender highlights that billion-dollar sites are low demand in the current market due to the risks associated with the capital outlay and the challenge of marketing over 1,000 units within the deadline of five-year deadline to obtain the Additional Buyer’s Stamp Duty (ABSD) remission.

Comparing the Dunman Road Tender with Other GLS Tenders

The percentage difference between the two bids for the Dunman Road site is the widest for a residential GLS tender since the Jalan Jurong Kechil tender closed in September 2018. Nicholas Mak, Head of Research & Consultancy at ERA Realty Network, reports that the difference between the top and second-highest bids in the Jalan Jurong Kechil GLS tender was 31.3%.

SingHaiyi’s successful bid of $1,350 per square foot per plot ratio (psf ppr) for the coveted property development project is approximately 4% higher than the $1,302 psf ppr paid by CDL for the GLS site located at Jalan Tembusu in District 15, which concluded in January earlier this year. The competitive bidding process indicates the robust demand for prime real estate in the area and underscores the value that both SingHaiyi and CDL place on these high-profile developments. The Jalan Tembusu site, which could yield around 640 units, attracted eight bids at the close of its tender.

Potential Development of the Dunman Road Site

The Dunman Road site has the potential to be developed into a new residential project comprising approximately 1,040 units.

In the highly sought-after District 15, two significant property developments are gearing up for launch: the Jalan Tembusu GLS site and the Thiam Siew Avenue site with freehold tenure, acquired en bloc by a joint venture between the esteemed Hoi Hup Realty and Sunway Developments in November last year. These remarkable developments are poised to offer a wide range of amenities and luxurious living options for those seeking the perfect blend of convenience and luxury. In addition, the Thiam Siew Avenue site can be developed into a new 820-unit condominium project.

Tricia Song, the Head of Research for Southeast Asia at CBRE, has observed that despite the highly desirable location of the Dunman Road site, the number of bids received for it was relatively low. She believes that the site’s large size and competition from new developments at Jalan Tembusu and Thiam Siew Avenue are the primary reasons for this. According to her estimates, the upcoming residential project at Dunman Road, Grand Dunman Price could be launched at $2,200 to $2,300 per square foot per plot ratio (psf ppr) – estimated.

Investment Potential in District 15 Properties

The competitive bidding for the Dunman Road site and the upcoming developments in District 15 demonstrate the strong investment potential of properties in this area. With the enhanced connectivity offered by the Thomson-East Coast Line, the value of properties in District 15 is expected to appreciate in the long term.

Furthermore, the limited supply of residential land in District 15, combined with the increasing demand for properties in prime locations, acquires properties in this area as a potentially lucrative investment opportunity.

Overall Outlook for Singapore’s Property Market

In property development, the prudent strategy employed in obtaining residential locales, exemplified by the Dunman Road GLS tender, signifies a more deliberate and cautious approach amidst prevailing market dynamics. Developers endeavor to present superior-quality ventures, aligning with the metamorphosing inclinations of domicile purchasers and investors while remaining vigilant of the hazards inherent in large-scale undertakings.

Notwithstanding this conservative attitude, the real estate sphere in Singapore persists in demonstrating tenacity, propelled by elements such as a fortified, unswerving economy and a heightened appetite for properties situated in preeminent locales. By the mutable terrain, developers are anticipated to maintain their concentration on cultivating worth for their constituents while addressing the requisites and preferences of home acquirers and financiers.