URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV

Mark Yip, Chief Executive Officer of Huttons Asia, states that the eye-watering rate for the site is a “significant dedication in the face of high interest rates. Considering these dangers, the bid of $1,202 psf ppr is reasonable”.

URA has awarded the tender for two just recently closed government land sale (GLS) sites. A residential site at Zion Roadway was awarded to a mutual project (JV) amongst City Developments Ltd (CDL) and Mitsui Fudosan, while a different GLS spot at Upper Thomson Roadway was awarded to a JV among GuocoLand and Hong Leong Holdings.

According to a GuocoLand spokesperson: “The Upper Thomson Road site is positioned in an exclusive landed housing spot, similar to the Lentor Hills estate which we have actually developed as a new superior exclusive residence estate via our developments such as Lentor Modern and Lentor Mansion. We are delighted to have the possibility to boost another new area at Springleaf with our placemaking abilities. The future advancement, which is served by the Springleaf MRT terminal on the Thomson-East Coast Line, are going to have about 940 units.”

The CDL-Mitsui Fudosan JV was the only one to send a proposal for the Zion Road spot when the tender closed up on April 4. Similarly, the GuocoLand-Hong Leong JV even sent the single offer for the Upper Thomson Roadway GLS spot when that tender closed on April 4. Eugene Lim, crucial executive officer, ERA Singapore, commented that both GLS sites are reasonably ‘untried’. “The government might have taken into consideration the tender prices provided for these locations to be affordable, regarding the problems that these designers are prepared to take on,” he says.

CDL and Mitsui Fudosan submitted a $1.107 billion bid for the 164,439 sq ft site, which converts to $1,202 psf per plot ratio (ppr). The site has a plot ratio of 5.6 and is zoned residential with business on the 1st storey. The brand-new development might produce as much as 1,170 brand-new non commercial units. This is also the first site released by the government that included devices under the new long-lasting serviced apartment scheme.

At the same time, the GuocoLand-Hong Leong JV sent a bid of $779.6 million for the 344,700 sq ft site along Upper Thomson Road. The rate equates to $905 psf ppr.

This was reiterated by Tricia Song, head of research study, Singapore and Southeast Asia, CBRE. She notes that the quote for the Zion Road site is a “significant” 30% less than the similar land parcel throughout the road, which has actually been turned into the 455-unit Riviere. “The approval of the lower-than-expected proposal price despite its being the single quote, is a recognition that market problems have actually transformed over the last 5-6 years given that the neighboring spot was granted, given factors such as enhanced ABSD, greater building expenses, financing expenses, in addition to danger premium for the (long-stay serviced apartments) element which is a new asset course,” explains Track.

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, adding: “Hence the quantum is larger, and with a bigger quantum the chances are similarly higher too”.

Tan foresees that the brand-new project might see a possible launch start-off rate of just under S$ 2,000 psf. “As the Upper Thomson Roadway Parcel B spot would be the first in a relatively underdeveloped location without skyscraper homes, there is some first mover benefits in a breathtaking district,” she claims.

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Wong Siew Ying, head of research and content at PropNex Realty, mentions that although the land rates were beneath market expectations URA likely thought of other factors in assessing the bids. “For instance, the Upper Thomson Roadway story remaining in a fairly untried new housing district, and the Zion Road story being the first property development to make up the long-stay serviced condos,” she states.

” At a land cost of S$ 1,202 psf ppr, the breakeven cost might perhaps vary in between S$ 2,400 psf and S$ 2,600 psf depending upon technical, material and design ideas, with launch rates beginning with S$ 2,700 psf,” states Alice Tan, head of consultancy at Knight Frank Singapore. She adds that the new property development could go for approximately S$ 3,000 psf and this price would certainly not just be palatable, however attractive for Singaporean buyers and long-term homeowners, whether for career or financial investment.

The JV affiliates have already indicated that they mean to develop the location right into a mixed-use property comprising two residential blocks, one that is 69 storeys and the other 64 storeys, with around 740 house units for sale in total. The planned development will even make up a retail platform, and a 35-storey block with regarding 290 rental home units.


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