URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
URA has recently awarded the tender for two just recently closed government land sale (GLS) sites. A residential location at Zion Road was awarded to a shared venture (JV) between City Developments Ltd (CDL) and Mitsui Fudosan, while a several GLS spot at Upper Thomson Road was presented to a JV between GuocoLand and Hong Leong Holdings.
The $905 psf ppr bid placed in by GuocoLand-Hong Leong is “fair” as it is a much bigger area compared to the Zion Road plot, says Yip, adding in: “Therefore the quantum is bigger, and with a bigger quantum the chances are correspondingly bigger also”.
The JV affiliates have already shown that they mean to develop the site right into a mixed-use property comprising 2 residential blocks, one that is 69 storeys and the other 64 floors, with around 740 house devices offer for sale in overall. The organized development will even make up a retail podium, and a 35-storey block with regarding 290 rental apartment units.
Mark Yip, CEO of Huttons Asia, says that the eye-watering cost for the spot is a “big dedication in the face of high rate of interest. Taking into consideration these dangers, the proposal of $1,202 psf ppr is reasonable”.
Wong Siew Ying, head of research and information at PropNex Real estate, indicates that even though the land fees were beneath market assumptions URA likely looked into other elements in evaluating the quotes. “For instance, the Upper Thomson Road plot being in a relatively untried new housing district, and the Zion Road story being the very first development to consist of the long-stay serviced apartments,” she says.
” At a land cost of S$ 1,202 psf ppr, the breakeven expense can possibly range between S$ 2,400 psf and S$ 2,600 psf depending on technical, material and style considerations, with kick off costs beginning with S$ 2,700 psf,” claims Alice Tan, head of consultancy at Knight Frank Singapore. She adds that the brand-new property development could launch at around S$ 3,000 psf and this price would certainly not just be palatable, but appealing for Singaporean property buyers and irreversible homeowners, whether for job or investment.
Meanwhile, the GuocoLand-Hong Leong JV submitted a proposal of $779.6 million for the 344,700 sq ft area near Upper Thomson Road. The price converts to $905 psf ppr.
The CDL-Mitsui Fudosan JV was the only one to send a quote for the Zion Road location the moment the tender closed on April 4. Likewise, the GuocoLand-Hong Leong JV also sent the single bid for the Upper Thomson Roadway GLS location when that tender closed on April 4. Eugene Lim, key executive officer, period Singapore, commented that both GLS sites are relatively ‘untried’. “The government might have considered the tender rates provided for these locations to be sensible, taking into consideration the problems that these designers are prepared to tackle,” he explains.
According to a GuocoLand spokesperson: “The Upper Thomson Road location is located in a premium landed real estate area, comparable to the Lentor Hills estate which we have actually developed as a new superior exclusive non commercial estate via our developments such as Lentor Modern and Lentor Mansion. We are excited to have the chance to uplift another new area at Springleaf through our placemaking abilities. The future advancement, which is served by the Springleaf MRT station on the Thomson-East Coast Line, will have around 940 units.”
This was echoed by Tricia Song, head of research study, Singapore and Southeast Asia, CBRE. She notices that the offer for the Zion Road location is a “significant” 30% lower than the similar land parcel across the road, which has been become the 455-unit Riviere. “The approval of the lower-than-expected quote cost in spite of its being the sole proposal, is a recognition that market conditions have actually changed over the previous 5-6 years given that the bordering site was awarded, given factors such as increased ABSD, greater building and construction expenses, funding costs, along with risk premium for the (long-stay serviced houses) part which is a brand-new possession class,” explains Track.
Tan anticipates that the brand-new property development may see a potential launch start-off rate of merely under S$ 2,000 psf. “As the Upper Thomson Roadway Parcel B site would be the first in a relatively pristine area without skyscraper houses, there is some very first mover benefits in a scenic precinct,” she says.
CDL and Mitsui Fudosan sent a $1.107 billion offer 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 industrial on the 1st storey. The brand-new property development can yield up to 1,170 brand-new home units. This is likewise the initial location launched by the government that featured devices under the new long-lasting serviced residence scheme.
