Strong bidding for Lakeside plot signals confidence despite outlook

All eyes on govt land sales programme for calibrations to tackle projected downturn

- Grace Leong

The state tender for a plot of residential land in Lakeside Drive near the Jurong Lake District closed on June 3 with six bids, in what analysts say is a vote of confidence by developers in private housing demand, especially at sites in established housing estates and near MRT stations.

The Government Land Sales (GLS) site, which is expected to offer 575 units and 1,000 sq m of commercial space, drew a top bid of $608 million from two subsidiaries of City Developments.

This translates to a land rate of $1,132 per sq ft per plot ratio.

The strong interest from developers for the Lakeside Drive plot comes after a Media Circle (Parcel B) site drew no bids on April 29 and a Lentor Gardens site drew a mere two bids on April 3.

Both these earlier tenders had led analysts to question if developers had turned cautious, given an increasingly uncertain macroeconomic outlook.

Tariff-related disruptions and turmoil have already caused the Government to revise down Singapore's 2025 gross domestic product growth forecasts, and analysts are watching how the changing global trading environment will affect the economy and, in turn, the housing market.

The industry is waiting to see how the GLS programme—the mechanism through which the state releases land for development by the private sector—will be calibrated to deal with the projected downturn.

In previous financial crises, the GLS programme was temporarily suspended in a bid to curtail housing supply—as was the case during the 1998 and 1999 Asian financial crisis, with the exception of some sites.

The Government resumed releasing sites only from 2000 when the market showed signs of recovery, said real estate veteran Bond Lam Chern Woon.