URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
The JV affiliates have already indicated that they mean to develop the site right into a mixed-use property making up 2 residential blocks, one that is 69 storeys and the other 64 storeys, with about 740 home devices offer for sale in total amount. The planned project will even consist of a retail podium, and a 35-storey block with concerning 290 rental apartment or condo units.
This was reiterated by Tricia Song, head of research, Singapore and Southeast Asia, CBRE. She notices that the offer for the Zion Road site is a “significant” 30% less than the similar land parcel across the road, which has been become the 455-unit Riviere. “The approval of the lower-than-expected quote cost despite its being the sole proposal, is an acknowledgment that market issues have altered over the last 5-6 years considering that the neighboring location was granted, given factors such as enhanced ABSD, higher construction expenses, funding prices, in addition to danger premium for the (long-stay serviced apartments) part which is a new asset course,” explains Song.
Mark Yip, CEO of Huttons Asia, states that the eye-watering price for the location is a “substantial dedication in the face of high interest rates. Taking into consideration these risks, the bid of $1,202 psf ppr is fair”.
” At a land rate of S$ 1,202 psf ppr, the breakeven expense could potentially extend in between S$ 2,400 psf and S$ 2,600 psf depending on technical, material and design considerations, with launch prices beginning with S$ 2,700 psf,” says Alice Tan, head of consultancy at Knight Frank Singapore. She includes that the new property development can go for around S$ 3,000 psf and this price would not only be palatable, but attractive for Singaporean buyers and long-term citizens, whether for job or financial investment.
According to a GuocoLand spokesperson: “The Upper Thomson Road spot is positioned in an exclusive landed housing area, similar to the Lentor Hills estate which we have developed as a new premium private residence estate via our projects such as Lentor Modern and Lentor Mansion. We are delighted to have the chance to uplift another brand-new neighbourhood at Springleaf via our placemaking abilities. The future development, which is offered by the Springleaf MRT terminal on the Thomson-East Coast Line, will have around 940 units.”
The CDL-Mitsui Fudosan JV was the only one to send a quote for the Zion Road spot when the tender shut on April 4. Furthermore, the GuocoLand-Hong Leong JV even submitted the single bid for the Upper Thomson Road GLS spot when that tender closed on April 4. Eugene Lim, key executive officer, age Singapore, commented that both GLS locations are reasonably ‘untried’. “The government may have taken into consideration the tender rates submitted for these sites to be reasonable, taking into consideration the hazards that these programmers are prepared to take on,” he says.
Wong Siew Ying, head of research and information at PropNex Real estate, mentions that even though the land costs were listed below market expectations URA likely thought of various other elements in assessing the bids. “For example, the Upper Thomson Road story remaining in a reasonably untried new housing district, and the Zion Roadway story being the very first property development to comprise the long-stay serviced apartments,” she states.
Tan predicts that the brand-new project might see a potential launch start-off cost of merely under S$ 2,000 psf. “As the Upper Thomson Road Parcel B area would be the first in a relatively underdeveloped area without skyscraper houses, there is some initial mover advantage in a beautiful district,” she says.
CDL and Mitsui Fudosan sent a $1.107 billion attempt for the 164,439 sq ft spot, which translates to $1,202 psf per plot ratio (ppr). The place has a story ratio of 5.6 and is zoned non commercial with commercial on the first level. The brand-new development could produce up to 1,170 new non commercial units. This is also the initial location released by the federal government that featured units under the new long-term serviced apartment program.
URA has granted the tender for two recently shut government land sale (GLS) spots. A housing location at Zion Road was granted to a mutual venture (JV) among City Developments Ltd (CDL) and Mitsui Fudosan, while a several GLS location at Upper Thomson Roadway was granted to a JV between GuocoLand and Hong Leong Holdings.
At the same time, the GuocoLand-Hong Leong JV submitted a bid of $779.6 million for the 344,700 sq ft site around Upper Thomson Road. The price equates to $905 psf ppr.
The $905 psf ppr bid placed in by GuocoLand-Hong Leong is “fair” as it is a much bigger site compared to the Zion Roadway plot, claims Yip, adding in: “For this reason the quantum is bigger, and with a larger quantum the risks are similarly higher also”.
