URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
According to a GuocoLand representative: “The Upper Thomson Road spot is located in an exclusive landed real estate spot, similar to the Lentor Hills estate which we have developed as a brand-new premium private residence estate through our developments such as Lentor Modern and Lentor Mansion. We are excited to have the opportunity to boost another new neighbourhood at Springleaf through our placemaking capacities. The future development, which is served by the Springleaf MRT station on the Thomson-East Coast Line, will have around 940 units.”
The JV associates have previously suggested that they intend to develop the spot into a mixed-use property consisting of two residential blocks, one that is 69 floors and the some other 64 storeys, with about 740 home units offer for sale in overall. The organized development will also make up a retail podium, and a 35-storey block with regarding 290 rental apartment or condo units.
Wong Siew Ying, head of research and information at PropNex Real estate, notes that even though the land costs were below market assumptions URA likely thought of other elements in assessing the bids. “For instance, the Upper Thomson Roadway story remaining in a reasonably untried brand-new housing district, and the Zion Roadway plot being the very first development to make up the long-stay serviced apartments,” she claims.
The $905 psf ppr bid put in by GuocoLand-Hong Leong is “reasonable” as it is a much bigger area compared to the Zion Roadway plot, states Yip, adding: “For this reason the quantum is bigger, and with a larger quantum the possibilities are correspondingly higher too”.
” At a land price of S$ 1,202 psf ppr, the breakeven price can perhaps extend between S$ 2,400 psf and S$ 2,600 psf depending upon technical, material and layout ideas, with kick off rates beginning with S$ 2,700 psf,” says Alice Tan, head of consultancy at Knight Frank Singapore. She includes that the brand-new development could launch at approximately S$ 3,000 psf and this price would certainly not only be palatable, but appealing for Singaporean homebuyers and permanent residents, whether for job or financial investment.
Mark Yip, Chief Executive Officer of Huttons Asia, says that the eye-watering cost for the site is a “substantial commitment in the face of high rate of interest. Taking into consideration these dangers, the bid of $1,202 psf ppr is reasonable”.
This was reiterated 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% less than the equivalent land parcel across the road, which has actually been become the 455-unit Riviere. “The acceptance of the lower-than-expected quote rate regardless of its being the sole proposal, is a recognition that market conditions have transformed over the previous 5-6 years given that the bordering site was granted, given elements such as enhanced ABSD, higher building expenses, funding expenses, as well as risk premium for the (long-stay serviced houses) element which is a new possession class,” declares Track.
Meanwhile, the GuocoLand-Hong Leong JV submitted a quote of $779.6 million for the 344,700 sq ft area around Upper Thomson Road. The price converts to $905 psf ppr.
The CDL-Mitsui Fudosan JV was the only one to send a bid for the Zion Road site the moment the tender shut on April 4. Similarly, the GuocoLand-Hong Leong JV also handed in the sole bid for the Upper Thomson Road GLS spot when that tender closed on April 4. Eugene Lim, vital executive officer, ERA Singapore, commented that both GLS sites are reasonably ‘untested’. “The state may have thought about the tender prices submitted for these sites to be sensible, taking into consideration the hazards that these programmers are prepared to tackle,” he says.
CDL and Mitsui Fudosan submitted a $1.107 billion attempt for the 164,439 sq ft site, which converts to $1,202 psf per plot ratio (ppr). The place has a story ratio of 5.6 and is zoned residential with commercial on the first level. The brand-new project can yield as much as 1,170 new residential units. This is also the very first spot released by the federal government that featured units under the new long-term serviced apartment program.
Tan anticipates that the brand-new project could see a possible launch opening cost of only under S$ 2,000 psf. “As the Upper Thomson Road Parcel B site would be the first in a rather underdeveloped region without high-rise houses, there is some first mover advantage in a beautiful precinct,” she says.
URA has recently awarded the tender for two recently closed government land sale (GLS) spots. A housing location at Zion Roadway was awarded to a joint venture (JV) amongst City Developments Ltd (CDL) and Mitsui Fudosan, whilst a several GLS site at Upper Thomson Roadway was presented to a JV within GuocoLand and Hong Leong Holdings.
