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 offer 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 storey. The brand-new project can yield up to 1,170 brand-new home units. This is likewise the initial spot released by the government that included units under the new long-term serviced apartment scheme.

The CDL-Mitsui Fudosan JV was the only one to submit a bid for the Zion Road site when the tender shut on April 4. Furthermore, the GuocoLand-Hong Leong JV also 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 locations are fairly ‘untested’. “The state might have taken into consideration the tender prices provided for these locations to be sensible, regarding the risks that these programmers are prepared to take on,” he explains.

Mark Yip, CEO of Huttons Asia, claims that the eye-watering rate for the location is a “substantial commitment in the face of high interest. Taking into account these dangers, the bid of $1,202 psf ppr is reasonable”.

The $905 psf ppr bid placed in by GuocoLand-Hong Leong is “reasonable” as it is a much bigger area compared to the Zion Road plot, states Yip, adding in: “Thus the quantum is bigger, and with a bigger quantum the risks are similarly bigger too”.

Tan forecasts that the brand-new property development could see a possible launch start-off price of only under S$ 2,000 psf. “As the Upper Thomson Road Parcel B area would be the very first in a rather pristine location without high-rise homes, there is some very first mover advantage in a scenic district,” she states.

At the same time, the GuocoLand-Hong Leong JV sent a quote of $779.6 million for the 344,700 sq ft area around Upper Thomson Road. The rate converts to $905 psf ppr.

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

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The JV associates have actually already shown that they intend to develop the spot right into a mixed-use development making up 2 residential blocks, one that is 69 floors and the other 64 storeys, with around 740 housing units available in total amount. The organized project will even make up a retail podium, and a 35-storey block with about 290 rental home units.

This was echoed by Tricia Song, head of study, Singapore and Southeast Asia, CBRE. She notices that the quote for the Zion Road spot is a “considerable” 30% lower than the similar land parcel across the road, which has been become the 455-unit Riviere. “The acceptance of the lower-than-expected quote price despite its being the sole bid, is a recognition that market conditions have actually changed over the past 5-6 years considering that the bordering site was granted, given variables such as increased ABSD, greater construction costs, funding costs, along with danger premium for the (long-stay serviced houses) element which is a brand-new property course,” says Track.

According to a GuocoLand representative: “The Upper Thomson Road location is situated in a premium landed real estate area, comparable to the Lentor Hills estate which we have actually established as a new premium exclusive residential estate through our projects such as Lentor Modern and Lentor Mansion. We are excited to have the opportunity to uplift another brand-new neighbourhood at Springleaf with our placemaking capabilities. The future advancement, which is served by the Springleaf MRT terminal on the Thomson-East Coast Line, are going to have about 940 units.”

Wong Siew Ying, head of research and content at PropNex Realty, notes that although the land costs were listed below market assumptions URA likely considered other factors in evaluating the bids. “For instance, the Upper Thomson Road plot remaining in a relatively untested new real estate precinct, and the Zion Road story being the initial development to make up the long-stay serviced apartments,” she says.

” At a land rate of S$ 1,202 psf ppr, the breakeven cost can perhaps vary between S$ 2,400 psf and S$ 2,600 psf depending on technical, material and design considerations, with launch prices starting from S$ 2,700 psf,” states Alice Tan, head of consultancy at Knight Frank Singapore. She adds that the brand-new project might launch at approximately S$ 3,000 psf and this price would not just be tasty, yet appealing for Singaporean homebuyers and long-term residents, whether for work or financial investment.