URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
The JV partners have previously shown that they plan to create the spot right into a mixed-use property making up two housing blocks, one that is 69 floors and the some other 64 floors, with about 740 house systems for sale in overall. The planned project is going to even comprise a retail platform, and a 35-storey block with concerning 290 rental house units.
URA has recently allocated the tender for 2 recently closed government land sale (GLS) locations. A residential spot at Zion Roadway was awarded to a shared project (JV) amongst City Developments Ltd (CDL) and Mitsui Fudosan, while a different GLS location at Upper Thomson Road was presented to a JV within GuocoLand and Hong Leong Holdings.
This was reiterated by Tricia Song, head of study, Singapore and Southeast Asia, CBRE. She notes that the bid for the Zion Road spot is a “significant” 30% less than the equivalent land parcel throughout the road, which has actually been become the 455-unit Riviere. “The approval of the lower-than-expected bid price despite its being the sole bid, is an acknowledgment that market issues have actually transformed over the last 5-6 years given that the neighboring site was awarded, given aspects such as enhanced ABSD, greater building fees, financing expenses, along with danger costs for the (long-stay serviced residences) component which is a brand-new possession class,” declares Song.
” At a land cost of S$ 1,202 psf ppr, the breakeven expense can possibly extend between S$ 2,400 psf and S$ 2,600 psf depending on technical, material and design ideas, with launch costs starting from S$ 2,700 psf,” says Alice Tan, head of consultancy at Knight Frank Singapore. She includes that the new property development can launch at about S$ 3,000 psf and this price would certainly not just be tasty, but appealing for Singaporean buyers and permanent locals, whether for career or investment.
The $905 psf ppr bid put in by GuocoLand-Hong Leong is “fair” as it is a much bigger site contrasted to the Zion Roadway plot, says Yip, adding: “Therefore the quantum is larger, and with a bigger quantum the possibilities are correspondingly higher also”.
Wong Siew Ying, head of research and content at PropNex Realty, mentions that even though the land rates were listed below market assumptions URA likely thought of other factors in analyzing the proposals. “For example, the Upper Thomson Road story remaining in a reasonably untried new real estate precinct, and the Zion Road story being the very first development to consist of the long-stay serviced flats,” she says.
Tan anticipates that the new property development may see a possible launch opening rate of only under S$ 2,000 psf. “As the Upper Thomson Roadway Parcel B site would be the very first in a fairly undeveloped location without high-rise homes, there is some initial mover advantage in a scenic precinct,” she says.
CDL and Mitsui Fudosan submitted a $1.107 billion attempt for the 164,439 sq ft spot, which equates to $1,202 psf per plot ratio (ppr). The place has a story ratio of 5.6 and is zoned residential with business on the first level. The new development could produce as much as 1,170 new non commercial units. This is also the initial site launched by the government that included devices under the new long-term serviced condominium arrangement.
At the same time, the GuocoLand-Hong Leong JV submitted a proposal of $779.6 million for the 344,700 sq ft area along Upper Thomson Road. The price equates to $905 psf ppr.
Mark Yip, CEO of Huttons Asia, says that the eye-watering cost for the location is a “big commitment in the face of high interest. Considering these threats, the bid of $1,202 psf ppr is reasonable”.
The CDL-Mitsui Fudosan JV was the only one to submit a bid for the Zion Road location the moment the tender shut on April 4. Likewise, the GuocoLand-Hong Leong JV even handed in the sole proposal for the Upper Thomson Road GLS spot when that tender closed on April 4. Eugene Lim, key executive officer, age Singapore, commented that both GLS sites are relatively ‘untested’. “The government may have considered the tender rates sent for these locations to be sensible, considering the risks that these designers are prepared to tackle,” he explains.
According to a GuocoLand spokesperson: “The Upper Thomson Road spot is situated in a premium landed housing place, comparable to the Lentor Hills estate which we have established as a brand-new premium exclusive residential estate with our developments such as Lentor Modern and Lentor Mansion. We are excited to have the chance to boost another brand-new area 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.”
