URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
URA has granted the tender for 2 just recently closed government land sale (GLS) sites. A housing spot at Zion Road was awarded to a mutual project (JV) between City Developments Ltd (CDL) and Mitsui Fudosan, while a several GLS spot at Upper Thomson Roadway was presented to a JV among GuocoLand and Hong Leong Holdings.
Mark Yip, CEO of Huttons Asia, says that the eye-watering price for the location is a “massive dedication in the face of high interest rates. Considering these threats, the bid of $1,202 psf ppr is reasonable”.
According to a GuocoLand spokesperson: “The Upper Thomson Road site is positioned in a restricted landed real estate area, similar to the Lentor Hills estate which we have developed as a brand-new premium exclusive residential estate with our projects such as Lentor Modern and Lentor Mansion. We are delighted to have the possibility to uplift another brand-new neighbourhood at Springleaf through our placemaking capacities. The future growth, which is offered by the Springleaf MRT terminal on the Thomson-East Coast Line, will have available 940 units.”
CDL and Mitsui Fudosan sent a $1.107 billion attempt for the 164,439 sq ft site, which equates to $1,202 psf per plot ratio (ppr). The area has a story ratio of 5.6 and is zoned residence with industrial on the 1st floor. The brand-new development might generate as much as 1,170 new non commercial units. This is also the very first spot released by the federal government that included units under the new long-lasting serviced condominium program.
Wong Siew Ying, head of research and information at PropNex Realty, indicates that even though the land costs were below market assumptions URA likely thought of various other aspects in assessing the proposals. “For instance, the Upper Thomson Roadway story being in a reasonably untested new housing district, and the Zion Road story being the initial development to consist of the long-stay serviced apartments,” she says.
The $905 psf ppr bid placed in by GuocoLand-Hong Leong is “fair” as it is a much larger area compared to the Zion Roadway plot, states Yip, including: “For this reason the quantum is bigger, and with a bigger quantum the risks are correspondingly higher as well”.
The CDL-Mitsui Fudosan JV was the only one to submit a quote for the Zion Road spot when the tender closed on April 4. Similarly, the GuocoLand-Hong Leong JV even sent the sole offer for the Upper Thomson Roadway GLS spot when that tender closed on April 4. Eugene Lim, key executive officer, ERA Singapore, commented that both GLS locations are fairly ‘untested’. “The state might have taken into consideration the tender prices sent for these sites to be reasonable, regarding the risks that these designers are prepared to tackle,” he says.
Tan predicts that the new development may see a possible launch start price of just under S$ 2,000 psf. “As the Upper Thomson Road Parcel B spot would be the very first in a rather underdeveloped location without skyscraper residences, there is some very first mover advantage in a beautiful precinct,” she claims.
The JV affiliates have actually already shown that they intend to establish the spot right into a mixed-use property consisting of 2 residential blocks, one that is 69 floors and the other 64 floors, with about 740 home systems available in total. The planned project is going to even make up a retail platform, and a 35-storey block with concerning 290 rental apartment units.
At the same time, the GuocoLand-Hong Leong JV sent a quote of $779.6 million for the 344,700 sq ft site along Upper Thomson Road. The cost converts to $905 psf ppr.
” At a land rate of S$ 1,202 psf ppr, the breakeven price might perhaps extend between S$ 2,400 psf and S$ 2,600 psf depending on technical, material and style considerations, with kick off prices beginning with S$ 2,700 psf,” says Alice Tan, head of consultancy at Knight Frank Singapore. She adds that the new property development could go for around S$ 3,000 psf and this price would certainly not only be palatable, but appealing for Singaporean property buyers and long-term homeowners, whether for work or investment.
This was reiterated by Tricia Song, head of research study, Singapore and Southeast Asia, CBRE. She notes that the bid for the Zion Road site is a “significant” 30% less than the similar land parcel across the road, which has been turned into the 455-unit Riviere. “The approval of the lower-than-expected bid rate in spite of its being the sole bid, is an acknowledgment that market problems have actually changed over the past 5-6 years considering that the neighboring site was awarded, given factors such as enhanced ABSD, greater building expenses, financing expenses, along with threat costs for the (long-stay serviced houses) element which is a brand-new possession class,” says Track.
