The first of the two lots to be put up for sale in the second half of the year under the government's land sale program is Lentor Gardens, which is on the official list, while the other, Lentor Central, is on the reserve list for developers to apply for the hook.
According to the Urban Redevelopment Authority's (URA) announcement on Monday (Oct. 31), Lentor Gardens covers an area of about 235,371 square feet (21,867 square meters) with a total floor area of about 494,290 square feet (45,921 square meters), with a maximum of eight floors in the low-floor zone and 16 floors in the mid-floor zone, and can accommodate 530 residential units.
The Rondout Road Central lot covers an area of approximately 158,264 square feet (14,703 square meters), with a total floor area of approximately 443,139 square feet (41,169 square meters), and the lot can be developed with 475 residential units.
To date, a total of four lots have been sold in this area, including Lot A on Lentor Hills Road, which was sold in January, Lentor Central, which was sold in September when tenders closed, Lot B on Lentor Hills Road, and Lentor Court, which was sold in July last year and is under development.
Other than the Lentor lot, the response to the other lots offered for sale in the area has been lukewarm, with only four bidders at most. Although the district is beginning to form a concentration of private residences and amenities are being added, the risk is raised as at least three new projects will be launched in the next two years.
The district's hot-selling Lentor Modern sold 508 of its 605 units within two days of its Sept. 17 opening. 512 units were sold in September, about 85 percent of the project, at a median price of $2,108 per square foot.
Rising interest rates have increased the cost of borrowing for developers. As a result, bidders for Rondout Gardens will see a downward adjustment in their bids. It is also unlikely that the London-Middle Road ready-to-sell lot will be ticked off for bidding for 12 months.
If Toronto Gardens is successfully sold, nearly 2,500 residential units will be added to the district, and the government may also fully market the 11 lots in the district in the next few years.
The tender is not expected to attract more than five bidders, with the highest bid expected to be between $1,050 and $1,150 per square foot of floor area ratio.
It is estimated that the bids will be in the same range because of the newly introduced cooling measures, used to calculate the Total Debt Servicing Ratio (Total Debt Servicing Ratio) interest rate, from 3.5% to 4%, buyers are limited to the amount of loans, which may affect future property prices. It is expected that the real estate developers participating in the tender will range from two to five.
As for the London-Central Road lot, which was launched for developers to tick on the same day, analysts generally believe that the chances of this lot being successfully ticked are not high.
The government may move the Toronto Middle Road lot to the positive list in the first half of next year's land sale, a risk that developers will need to consider when bidding for the Toronto Park lot.
The tender for the Toronto Gardens lot will close at 12 noon on April 4, 2023.
