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

The JV affiliates have actually already suggested that they intend to develop the site into a mixed-use property comprising two non commercial blocks, one that is 69 floors and the other 64 storeys, with about 740 house systems offer for sale in total amount. The organized project will even comprise a retail podium, and a 35-storey block with about 290 rental house units.

The $905 psf ppr bid placed in by GuocoLand-Hong Leong is “reasonable” as it is a much bigger location contrasted to the Zion Road plot, states Yip, adding in: “Hence the quantum is larger, and with a larger quantum the possibilities are correspondingly higher too”.

URA has recently allocated the tender for 2 recently shut government land sale (GLS) sites. A non commercial location at Zion Roadway was granted to a shared venture (JV) among City Developments Ltd (CDL) and Mitsui Fudosan, while a several GLS location at Upper Thomson Road was awarded to a JV within GuocoLand and Hong Leong Holdings.

The CDL-Mitsui Fudosan JV was the only one to submit a proposal for the Zion Road site the moment the tender shut on April 4. Likewise, the GuocoLand-Hong Leong JV even submitted the single proposal for the Upper Thomson Road GLS site when that tender closed on April 4. Eugene Lim, vital executive officer, ERA Singapore, commented that both GLS spots are reasonably ‘untried’. “The government might have thought about the tender prices submitted for these spots to be reasonable, taking into consideration the risks that these designers are prepared to take on,” he states.

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 translates to $905 psf ppr.

Tan foresees that the new development might see a possible launch start rate of merely under S$ 2,000 psf. “As the Upper Thomson Road Parcel B spot would be the first in a rather undeveloped area without skyscraper houses, there is some first mover advantage in a breathtaking precinct,” she says.

This was echoed by Tricia Song, head of research, Singapore and Southeast Asia, CBRE. She notes that the bid for the Zion Road spot is a “substantial” 30% lower than the comparable land parcel throughout the road, which has been become the 455-unit Riviere. “The acceptance of the lower-than-expected quote price regardless of its being the sole proposal, is a recognition that market problems have changed over the last 5-6 years since the neighboring location was awarded, given aspects such as increased ABSD, greater building expenses, funding prices, as well as threat premium for the (long-stay serviced residences) element which is a new asset course,” declares Song.

Wong Siew Ying, head of research and content at PropNex Real estate, mentions that even though the land fees were below market expectations URA likely thought of various other factors in evaluating the quotes. “For instance, the Upper Thomson Roadway story remaining in a fairly untried new housing precinct, and the Zion Road plot being the first development to comprise the long-stay serviced apartments,” she claims.

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Mark Yip, CEO of Huttons Asia, claims that the eye-watering rate for the site is a “big dedication in the face of high rate of interest. Taking into account these threats, the quote of $1,202 psf ppr is fair”.

” At a land cost of S$ 1,202 psf ppr, the breakeven cost can possibly extend in between S$ 2,400 psf and S$ 2,600 psf basing on technical, material and design considerations, with kick off costs starting from S$ 2,700 psf,” says Alice Tan, head of consultancy at Knight Frank Singapore. She adds that the new property development might go for approximately S$ 3,000 psf and this price would not just be palatable, but attractive for Singaporean homebuyers and irreversible locals, whether for job or financial investment.

CDL and Mitsui Fudosan submitted a $1.107 billion attempt for the 164,439 sq ft spot, which converts to $1,202 psf per plot ratio (ppr). The area has a plot ratio of 5.6 and is zoned non commercial with industrial on the 1st level. The new property development might produce up to 1,170 brand-new home units. This is also the initial site released by the federal government that included units under the new long-lasting serviced condominium arrangement.

According to a GuocoLand speaker: “The Upper Thomson Road spot is located in a premium landed housing region, similar to the Lentor Hills estate which we have established as a new premium private residence estate via our projects such as Lentor Modern and Lentor Mansion. We are delighted to have the possibility to boost another new neighbourhood at Springleaf via our placemaking capabilities. The future growth, which is served by the Springleaf MRT terminal on the Thomson-East Coast Line, will have about 940 units.”

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