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Signs Of Property Downturn?

Lentor Gardens Land Tender & Implication

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On April 4, 2023, a single bidder, GuocoLand (Singapore) Pte. Ltd. and Intrepid Investments Pte. Ltd., won the land parcel at Lentor Gardens. The outcome was expected, as both developers have a presence in the Lentor Estate. GuocoLand developed Lentor Modern, which has a strong sales rate of 88.26% as of April 10th, while Intrepid Investments Lentor Hills Residences is set to launch in Q2-Q3 2023.

The possibility of an oversupply of residential units in the vicinity probably leads to the absence of other developers. It’s worth noting that Lentor Gardens is the fifth land parcel to be tendered since the government’s first land tender at the new Lentor Estate in 2021, and there are still plots in reserve.

New Low In Lentor Estate

What caught market watchers surprise was perhaps the price of the land tendered as it is the lowest. After a slew of high land bidding and new launches being sold at an eye-watering price, is this a sign of a property downturn everyone is predicting?


The estimated land cost for Lentor Gardens is around S$985 per square foot per plot ratio (psf ppr), based on the tendered sale price. This figure is 13% lower than the price for Lentor Hills Road (Parcel B), awarded to TID Residential Pte. Ltd. on September 19, 2022, and 19% lower than the cost for Lentor Modern. These comparisons provide a helpful context for understanding the relative value of the Lentor Gardens land parcel.

Potential homeowners may see this as an opportunity to buy into Lentor Estate at a lower price when it launches in the near future, but is it really the case?

Harmonisation of Floor Area

Currently, different agencies adopt different metrics to measure the floor area for different purposes. For instance, the Urban Redevelopment Authority (URA) employs gross floor area (GFA) to assess building intensity, the Singapore Land Authority (SLA) employs strata area to define ownership boundaries, the Building and Construction Authority (BCA) utilizes statistical gross floor area (SGFA) to measure the overall floor areas of a building, and the Singapore Civil Defence Force (SCDF) uses accessible floor area (AFA) to ascertain fire safety requirements.


The varying definitions of floor area can also create confusion for property owners who want to undertake additions and alterations within their strata units. These property owners may encounter an increase in the gross floor area (GFA) of the development, even if there is no increase in strata floor area.

In short, agreeing to standard metrics utilised within different agencies to avoid confusion and complications. You can read about the technical details by clicking this link.


Adopting new floor area measurement methods will likely impact how developers calculate the gross floor area (GFA) of internal areas and balconies. Under the new guidelines, developers may incur higher costs due to the need to conform to the new measurements. The additional costs associated with conforming to the new measurement standards may offset any cost savings that result from a lower land cost. Lentor Gardens will be affected by the new guidelines as it takes effect on all GLS & iGLS launched on or after 1st September 2022.

Rising Cost Of Construction

Image From THG

In addition to the impact of new floor area measurement standards, rising costs associated with construction and manpower can also lead to higher overall development costs. These higher costs can negate any savings resulting from a lower land cost. Developers may need to incur higher costs for materials, labour, and equipment, which can ultimately drive up the selling price of the development. In a competitive market, developers may need to balance the desire for a lower land cost with the need to ensure that the development remains profitable in light of rising costs.

Market watchers have reported a significant increase in construction costs over the past few years, particularly in Singapore Core Central Region (CCR). In 2019, construction costs were estimated to be around S$700 per square foot (psf) in the CCR, but by 2023, this figure had risen to around S$1000 psf. Similar increases have been observed in the Rest of Central Region (RCR), where construction costs have risen from around S$450 psf to S$650 psf, and in the Outside of Central Region (OCR), where costs have increased from S$300 psf to S$450 psf. These rising costs can significantly impact development profitability and increase selling prices for new developments.

The Need To Protect Prices

The fact that GuocoLand and Intrepid Investments bid for the land parcel at Lentor Gardens indicates their confidence in and commitment to this location. Having previously developed projects in the vicinity, these developers are likely to be well aware of the market conditions in the area. They are unlikely to wage a price war by lowering the selling price. Instead, they are more likely to hold the price steady and wait for the initial projects to sell out before offering new units at potentially higher prices.

This strategy can help ensure the developers maximize their profits and avoid over-saturating the market with too many units at once.

Lentor Modern Transactions

Lentor Modern, a mixed-use development in the Lentor Estate, currently transacts at an average price of S$2,083 per square foot (psf). Market analysts expect that the upcoming launch of the Lentor Gardens site will likely start at a price range of between S$1,930 psf and S$2,050 psf, depending on prevailing market conditions.

While this pricing may be influenced by various factors, such as construction costs and market demand, it is clear that the developers will be aiming to optimize their returns while remaining competitive in the market.

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