URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
The $905 psf ppr bid placed in by GuocoLand-Hong Leong is “fair” as it is a much bigger location compared to the Zion Road plot, says Yip, adding in: “Hence the quantum is larger, and with a bigger quantum the risks are similarly bigger as well”.
At the same time, the GuocoLand-Hong Leong JV submitted a quote of $779.6 million for the 344,700 sq ft area near Upper Thomson Road. The price translates to $905 psf ppr.
CDL and Mitsui Fudosan submitted a $1.107 billion attempt for the 164,439 sq ft location, which translates to $1,202 psf per plot ratio (ppr). The site has a story ratio of 5.6 and is zoned residence with industrial on the first storey. The brand-new project could generate as much as 1,170 new home units. This is likewise the first site launched by the federal government that included devices under the new long-term serviced residence program.
The CDL-Mitsui Fudosan JV was the only one to send a bid for the Zion Road location when the tender closed up on April 4. Similarly, the GuocoLand-Hong Leong JV even handed in the sole proposal for the Upper Thomson Roadway GLS site when that tender closed on April 4. Eugene Lim, essential executive officer, period Singapore, commented that both GLS locations are fairly ‘untried’. “The state might have thought about the tender prices submitted for these sites to be affordable, taking into consideration the risks that these designers are prepared to take on,” he explains.
According to a GuocoLand speaker: “The Upper Thomson Road spot is located in a premium landed real estate spot, comparable to the Lentor Hills estate which we have established as a brand-new premium personal residence estate via our projects such as Lentor Modern and Lentor Mansion. We are delighted to have the chance to boost another brand-new area at Springleaf via our placemaking abilities. The future advancement, which is served by the Springleaf MRT station on the Thomson-East Coast Line, are going to have available 940 units.”
The JV partners have actually already shown that they mean to establish the spot into a mixed-use development consisting of 2 housing blocks, one that is 69 floors and the some other 64 storeys, with about 740 residential devices up for sale in total. The scheduled project is going to even consist of a retail platform, and a 35-storey block with concerning 290 rental house units.
URA has recently granted the tender for 2 just recently shut government land sale (GLS) spots. A housing location at Zion Road was awarded to a joint venture (JV) amongst City Developments Ltd (CDL) and Mitsui Fudosan, while a different GLS location at Upper Thomson Road was awarded to a JV within GuocoLand and Hong Leong Holdings.
Mark Yip, CEO of Huttons Asia, says that the eye-watering rate for the spot is a “significant dedication in the face of high interest. Taking into consideration these risks, the bid of $1,202 psf ppr is fair”.
Wong Siew Ying, head of research and content at PropNex Real estate, mentions that although the land rates were below market assumptions URA likely thought of other aspects in analyzing the quotes. “For instance, the Upper Thomson Road story remaining in a relatively untested brand-new real estate precinct, and the Zion Roadway plot being the very first development to make up the long-stay serviced flats,” she states.
” At a land cost of S$ 1,202 psf ppr, the breakeven price can potentially extend in between S$ 2,400 psf and S$ 2,600 psf depending on technical, material and layout ideas, with kick off rates 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 not only be palatable, yet appealing for Singaporean buyers and long-term residents, whether for job or investment.
This was reiterated by Tricia Song, head of study, Singapore and Southeast Asia, CBRE. She notes that the quote for the Zion Road spot is a “significant” 30% lower than the similar land parcel across the road, which has been turned into the 455-unit Riviere. “The acceptance of the lower-than-expected quote cost despite its being the sole quote, is an acknowledgment that market issues have transformed over the past 5-6 years considering that the bordering spot was awarded, given aspects such as enhanced ABSD, greater building and construction fees, financing costs, in addition to danger premium for the (long-stay serviced houses) part which is a new possession course,” says Song.
Tan anticipates that the brand-new property development might see a potential launch start-off cost of just under S$ 2,000 psf. “As the Upper Thomson Roadway Parcel B spot would be the first in a relatively pristine location without skyscraper residences, there is some first mover advantage in a breathtaking precinct,” she claims.
