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 shut on April 4. Likewise, the GuocoLand-Hong Leong JV also submitted the single offer for the Upper Thomson Roadway GLS site when that tender closed on April 4. Eugene Lim, vital executive officer, ERA Singapore, commented that both GLS sites are relatively ‘untried’. “The government may have taken into consideration the tender rates provided for these spots to be practical, regarding the risks that these designers are prepared to take on,” he states.
The $905 psf ppr bid put in by GuocoLand-Hong Leong is “reasonable” as it is a much bigger site compared to the Zion Roadway plot, says Yip, adding: “Hence the quantum is bigger, and with a larger quantum the chances are similarly bigger as well”.
CDL and Mitsui Fudosan submitted a $1.107 billion offer for the 164,439 sq ft site, which converts to $1,202 psf per plot ratio (ppr). The area has a plot ratio of 5.6 and is zoned non commercial with industrial on the first storey. The brand-new development might yield as much as 1,170 brand-new home units. This is also the very first location launched by the government that included devices under the new long-term serviced residence scheme.
URA has recently awarded the tender for two just recently shut government land sale (GLS) sites. A housing site at Zion Road was granted to a shared project (JV) among City Developments Ltd (CDL) and Mitsui Fudosan, whilst a different GLS spot at Upper Thomson Road was granted to a JV among GuocoLand and Hong Leong Holdings.
” At a land price of S$ 1,202 psf ppr, the breakeven cost could perhaps vary in between S$ 2,400 psf and S$ 2,600 psf basing on technical, material and design factors, with kick off 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 around S$ 3,000 psf and this price would certainly not only be tasty, yet appealing for Singaporean property buyers and permanent residents, whether for career or financial investment.
At the same time, the GuocoLand-Hong Leong JV sent a quote of $779.6 million for the 344,700 sq ft place along Upper Thomson Road. The cost translates to $905 psf ppr.
Mark Yip, Chief Executive Officer of Huttons Asia, claims that the eye-watering cost for the site is a “substantial dedication in the face of high rate of interest. Thinking about these dangers, the bid of $1,202 psf ppr is fair”.
Tan forecasts that the new property development may see a possible launch opening cost of merely under S$ 2,000 psf. “As the Upper Thomson Roadway Parcel B area would be the very first in a fairly pristine location without high-rise residences, there is some first mover benefits in a scenic district,” she says.
This was reiterated by Tricia Song, head of study, Singapore and Southeast Asia, CBRE. She mentions that the offer for the Zion Road location is a “substantial” 30% less than the similar land parcel across the road, which has actually been turned into the 455-unit Riviere. “The approval of the lower-than-expected proposal price despite its being the single bid, is a recognition that market problems have actually altered over the past 5-6 years because the neighboring site was granted, given aspects such as increased ABSD, greater construction costs, funding prices, as well as threat premium for the (long-stay serviced houses) part which is a new property class,” explains Track.
According to a GuocoLand spokesperson: “The Upper Thomson Road spot is positioned in a premium landed real estate spot, similar to the Lentor Hills estate which we have established as a brand-new premium exclusive residence estate via our projects such as Lentor Modern and Lentor Mansion. We are delighted to have the opportunity to uplift another new neighbourhood at Springleaf with our placemaking capacities. The future development, which is served by the Springleaf MRT station on the Thomson-East Coast Line, are going to have around 940 units.”
Wong Siew Ying, head of research and content at PropNex Realty, mentions that even though the land fees were listed below market expectations URA likely thought of various other factors in analyzing the proposals. “For instance, the Upper Thomson Roadway plot remaining in a fairly untried new housing precinct, and the Zion Roadway story being the very first development to comprise the long-stay serviced apartments,” she claims.
The JV affiliates have previously indicated that they mean to create the location into a mixed-use property comprising 2 housing blocks, one that is 69 storeys and the some other 64 floors, with about 740 housing units for sale in total. The organized project is going to even make up a retail platform, and a 35-storey block with about 290 rental apartment units.
