URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
CDL and Mitsui Fudosan sent a $1.107 billion bid for the 164,439 sq ft site, which converts to $1,202 psf per plot ratio (ppr). The area has a story ratio of 5.6 and is zoned residential with business on the first storey. The brand-new project can produce approximately 1,170 new non commercial units. This is likewise the initial site released by the federal government that included units under the new long-term serviced residence arrangement.
The $905 psf ppr bid put in by GuocoLand-Hong Leong is “fair” as it is a much larger location compared to the Zion Roadway plot, says Yip, including: “Hence the quantum is bigger, and with a larger quantum the possibilities are correspondingly bigger also”.
Meanwhile, the GuocoLand-Hong Leong JV sent a proposal of $779.6 million for the 344,700 sq ft site along Upper Thomson Road. The cost equates to $905 psf ppr.
Mark Yip, CEO of Huttons Asia, states that the eye-watering cost for the site is a “significant dedication in the face of high interest rates. Taking into account these dangers, the bid of $1,202 psf ppr is fair”.
URA has recently granted the tender for two recently shut government land sale (GLS) spots. A residential spot at Zion Road was awarded to a joint venture (JV) amongst City Developments Ltd (CDL) and Mitsui Fudosan, whilst a different GLS location at Upper Thomson Roadway was awarded to a JV among GuocoLand and Hong Leong Holdings.
This was reiterated by Tricia Song, head of research, Singapore and Southeast Asia, CBRE. She mentions that the quote for the Zion Road location is a “considerable” 30% lower than the comparable land parcel throughout the road, which has actually been developed into the 455-unit Riviere. “The acceptance of the lower-than-expected quote rate in spite of its being the sole proposal, is an acknowledgment that market conditions have actually transformed over the past 5-6 years since the neighboring spot was awarded, given aspects such as enhanced ABSD, greater building expenses, funding prices, as well as threat costs for the (long-stay serviced houses) component which is a new possession course,” explains Track.
The JV partners have previously indicated that they plan to develop the site into a mixed-use property consisting of 2 housing blocks, one that is 69 storeys and the other 64 storeys, with around 740 housing systems up for sale in total amount. The scheduled development will even consist of a retail platform, and a 35-storey block with regarding 290 rental apartment or condo units.
The CDL-Mitsui Fudosan JV was the only one to submit a bid for the Zion Road site the moment the tender shut on April 4. Similarly, the GuocoLand-Hong Leong JV also sent the sole proposal 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 locations are reasonably ‘untested’. “The state might have taken into consideration the tender prices submitted for these sites to be practical, considering the problems that these programmers are prepared to take on,” he states.
Tan predicts that the new project could see a possible launch start-off cost of just under S$ 2,000 psf. “As the Upper Thomson Roadway Parcel B area would be the first in a fairly undeveloped location without skyscraper residences, there is some very first mover benefits in a beautiful precinct,” she says.
According to a GuocoLand representative: “The Upper Thomson Road spot is positioned in an exclusive landed housing region, similar to the Lentor Hills estate which we have established as a brand-new superior private residential estate with our developments such as Lentor Modern and Lentor Mansion. We are delighted to have the chance to boost another new neighbourhood at Springleaf via our placemaking abilities. The future growth, which is served by the Springleaf MRT terminal on the Thomson-East Coast Line, are going to have available 940 units.”
Wong Siew Ying, head of research and content at PropNex Real estate, notes that although the land rates were below market expectations URA likely considered other elements in assessing the quotes. “For example, the Upper Thomson Roadway plot being in a fairly untried new housing district, and the Zion Roadway story being the very first development to comprise the long-stay serviced apartments,” she states.
” At a land price of S$ 1,202 psf ppr, the breakeven cost could possibly vary between S$ 2,400 psf and S$ 2,600 psf depending on technical, material and layout factors, with launch prices starting from S$ 2,700 psf,” says Alice Tan, head of consultancy at Knight Frank Singapore. She adds that the brand-new development might go for approximately S$ 3,000 psf and this price would not only be tasty, yet attractive for Singaporean buyers and irreversible residents, whether for occupation or financial investment.
