URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
CDL and Mitsui Fudosan submitted a $1.107 billion bid 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 residence with commercial on the 1st storey. The brand-new development could generate approximately 1,170 brand-new residential units. This is also the first site launched by the federal government that featured devices under the new long-term serviced condominium scheme.
Mark Yip, Chief Executive Officer of Huttons Asia, says that the eye-watering price for the site is a “substantial commitment in the face of high interest. Taking into account these threats, the quote of $1,202 psf ppr is fair”.
URA has recently allocated the tender for two recently shut government land sale (GLS) spots. A housing site at Zion Roadway was awarded to a shared project (JV) amongst City Developments Ltd (CDL) and Mitsui Fudosan, while a different GLS site at Upper Thomson Road was awarded to a JV among GuocoLand and Hong Leong Holdings.
According to a GuocoLand representative: “The Upper Thomson Road location is located in a restricted landed housing place, similar to the Lentor Hills estate which we have developed as a brand-new superior personal non commercial estate with our developments such as Lentor Modern and Lentor Mansion. We are excited to have the possibility to uplift another new neighbourhood at Springleaf with our placemaking capabilities. The future advancement, which is offered by the Springleaf MRT station on the Thomson-East Coast Line, will have about 940 units.”
The JV associates have already shown that they plan to establish the spot into a mixed-use property making up two residential blocks, one that is 69 storeys and the some other 64 storeys, with around 740 home devices available in total. The planned development will even consist of a retail podium, and a 35-storey block with regarding 290 rental house units.
Wong Siew Ying, head of research and content at PropNex Realty, mentions that although the land fees were beneath market expectations URA likely looked into other aspects in evaluating the bids. “For instance, the Upper Thomson Roadway story remaining in a fairly untried brand-new housing precinct, and the Zion Road plot being the very first development to comprise the long-stay serviced condos,” she claims.
This was reiterated by Tricia Song, head of study, Singapore and Southeast Asia, CBRE. She notes that the offer for the Zion Road location is a “substantial” 30% less than the equivalent land parcel throughout the road, which has actually been developed into the 455-unit Riviere. “The approval of the lower-than-expected quote price despite its being the single quote, is a recognition that market issues have altered over the previous 5-6 years considering that the neighboring location was awarded, given elements such as enhanced ABSD, greater construction expenses, financing expenses, in addition to danger premium for the (long-stay serviced houses) component which is a brand-new property course,” says Tune.
The CDL-Mitsui Fudosan JV was the only one to submit a bid for the Zion Road location when the tender closed on April 4. Likewise, the GuocoLand-Hong Leong JV also handed in the single offer for the Upper Thomson Road GLS location when that tender closed on April 4. Eugene Lim, vital executive officer, period Singapore, commented that both GLS sites are relatively ‘untested’. “The state might have taken into consideration the tender costs sent for these sites to be affordable, taking into consideration the hazards that these programmers are prepared to tackle,” he states.
Meanwhile, the GuocoLand-Hong Leong JV sent a proposal of $779.6 million for the 344,700 sq ft area near Upper Thomson Road. The price converts to $905 psf ppr.
Tan anticipates that the brand-new project may see a possible launch opening price of merely under S$ 2,000 psf. “As the Upper Thomson Roadway Parcel B area would certainly be the very first in a fairly undeveloped area without skyscraper residences, there is some initial mover advantage in a picturesque district,” she claims.
” At a land rate of S$ 1,202 psf ppr, the breakeven price might perhaps range between S$ 2,400 psf and S$ 2,600 psf basing on technical, material and design ideas, with kick off rates starting from S$ 2,700 psf,” says Alice Tan, head of consultancy at Knight Frank Singapore. She adds that the new property development might launch at approximately S$ 3,000 psf and this price would certainly not just be palatable, but appealing for Singaporean homebuyers and permanent residents, whether for work or financial investment.
The $905 psf ppr bid placed in by GuocoLand-Hong Leong is “fair” as it is a much bigger area compared to the Zion Roadway plot, states Yip, adding: “Therefore the quantum is bigger, and with a bigger quantum the risks are correspondingly higher as well”.
