URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
The CDL-Mitsui Fudosan JV was the only one to send a quote for the Zion Road location when the tender closed up on April 4. Likewise, the GuocoLand-Hong Leong JV even handed in the single bid for the Upper Thomson Road GLS site when that tender closed on April 4. Eugene Lim, key executive officer, age Singapore, commented that both GLS spots are fairly ‘untried’. “The government may have considered the tender rates provided for these spots to be affordable, taking into consideration the hazards that these programmers are prepared to handle,” he explains.
Mark Yip, CEO of Huttons Asia, claims that the eye-watering cost for the site is a “big dedication in the face of high rate of interest. Thinking about these risks, the quote of $1,202 psf ppr is fair”.
Wong Siew Ying, head of research and content at PropNex Realty, mentions that even though the land rates were beneath market assumptions URA likely looked into various other aspects in evaluating the proposals. “For example, the Upper Thomson Roadway plot being in a reasonably untried new housing precinct, and the Zion Road story being the first property development to make up the long-stay serviced condos,” she claims.
” At a land rate of S$ 1,202 psf ppr, the breakeven cost could potentially range between S$ 2,400 psf and S$ 2,600 psf depending upon technical, material and design factors, with launch prices starting from S$ 2,700 psf,” says Alice Tan, head of consultancy at Knight Frank Singapore. She includes that the new development could go for approximately S$ 3,000 psf and this price would not just be tasty, however attractive for Singaporean buyers and permanent locals, whether for career or investment.
Tan foresees that the brand-new development may see a potential launch opening price of merely under S$ 2,000 psf. “As the Upper Thomson Road Parcel B spot would be the very first in a relatively undeveloped location without skyscraper homes, there is some very first mover advantage in a scenic district,” she claims.
At the same time, the GuocoLand-Hong Leong JV sent a bid of $779.6 million for the 344,700 sq ft place near Upper Thomson Road. The cost equates to $905 psf ppr.
The JV partners have already suggested that they mean to develop the site into a mixed-use property consisting of two housing blocks, one that is 69 floors and the other 64 storeys, with about 740 home units offer for sale in overall. The planned project will also consist of a retail platform, and a 35-storey block with concerning 290 rental home units.
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, states Yip, adding in: “Thus the quantum is bigger, and with a bigger quantum the risks are correspondingly higher as well”.
According to a GuocoLand speaker: “The Upper Thomson Road location is situated in an exclusive landed real estate region, similar to the Lentor Hills estate which we have developed as a new premium private residence estate through our projects such as Lentor Modern and Lentor Mansion. We are excited to have the opportunity to uplift another brand-new area at Springleaf through our placemaking abilities. The future development, which is served by the Springleaf MRT station on the Thomson-East Coast Line, will have about 940 units.”
URA has allocated the tender for two recently shut government land sale (GLS) locations. A housing location at Zion Roadway was awarded to a joint venture (JV) among City Developments Ltd (CDL) and Mitsui Fudosan, whilst a several GLS location at Upper Thomson Roadway was awarded to a JV within GuocoLand and Hong Leong Holdings.
This was echoed by Tricia Song, head of research, Singapore and Southeast Asia, CBRE. She notices that the offer for the Zion Road site is a “considerable” 30% lower than the comparable land parcel throughout the road, which has been developed into the 455-unit Riviere. “The acceptance of the lower-than-expected bid price despite its being the single bid, is a recognition that market problems have transformed over the last 5-6 years considering that the neighboring spot was granted, given variables such as increased ABSD, higher building costs, financing prices, in addition to danger premium for the (long-stay serviced houses) component which is a new possession class,” declares Tune.
CDL and Mitsui Fudosan sent a $1.107 billion attempt for the 164,439 sq ft location, which translates to $1,202 psf per plot ratio (ppr). The site has a story ratio of 5.6 and is zoned residential with industrial on the first storey. The brand-new property development can produce approximately 1,170 brand-new home units. This is also the first site released by the government that included devices under the new long-term serviced residence arrangement.