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 site when the tender closed on April 4. Furthermore, the GuocoLand-Hong Leong JV even submitted the single proposal for the Upper Thomson Roadway GLS site when that tender closed on April 4. Eugene Lim, essential executive officer, ERA Singapore, commented that both GLS sites are relatively ‘untried’. “The state may have taken into consideration the tender rates provided for these spots to be affordable, regarding the problems that these programmers are prepared to handle,” he says.
CDL and Mitsui Fudosan sent a $1.107 billion bid for the 164,439 sq ft location, which converts to $1,202 psf per plot ratio (ppr). The area has a plot ratio of 5.6 and is zoned residence with industrial on the first floor. The new property development might yield approximately 1,170 brand-new home units. This is also the very first spot launched by the federal government that featured devices under the new long-lasting serviced residence arrangement.
” At a land price of S$ 1,202 psf ppr, the breakeven price could potentially extend in between S$ 2,400 psf and S$ 2,600 psf depending on technical, material and design ideas, with launch costs beginning with S$ 2,700 psf,” states Alice Tan, head of consultancy at Knight Frank Singapore. She includes that the brand-new development might launch at around S$ 3,000 psf and this price would not just be tasty, yet appealing for Singaporean property buyers and long-term homeowners, whether for career or financial investment.
Wong Siew Ying, head of research and content at PropNex Realty, indicates that even though the land rates were listed below market expectations URA likely thought of various other elements in analyzing the proposals. “For instance, the Upper Thomson Roadway plot being in a reasonably untried brand-new housing precinct, and the Zion Roadway story being the first property development to consist of the long-stay serviced flats,” she claims.
This was echoed by Tricia Song, head of study, Singapore and Southeast Asia, CBRE. She notices that the bid for the Zion Road location is a “significant” 30% less than the equivalent land parcel throughout the road, which has actually been turned into the 455-unit Riviere. “The approval of the lower-than-expected bid rate despite its being the single proposal, is a recognition that market issues have actually changed over the past 5-6 years considering that the neighboring site was awarded, given factors such as increased ABSD, higher construction expenses, financing expenses, in addition to danger premium for the (long-stay serviced apartments) element which is a new property course,” explains Track.
Tan foresees that the brand-new project may see a possible launch opening cost of just under S$ 2,000 psf. “As the Upper Thomson Roadway Parcel B spot would be the first in a rather undeveloped region without skyscraper houses, there is some initial mover advantage in a beautiful precinct,” she states.
According to a GuocoLand speaker: “The Upper Thomson Road location is situated in a restricted landed housing area, comparable to the Lentor Hills estate which we have actually developed as a brand-new superior exclusive non commercial estate with our developments such as Lentor Modern and Lentor Mansion. We are delighted to have the opportunity to boost another brand-new area at Springleaf via our placemaking abilities. The future advancement, which is served by the Springleaf MRT terminal on the Thomson-East Coast Line, will have around 940 units.”
The JV associates have previously indicated that they intend to establish the spot into a mixed-use property making up 2 housing blocks, one that is 69 floors and the other 64 floors, with about 740 residential systems available in total. The planned project is going to also consist of a retail podium, and a 35-storey block with about 290 rental house units.
At the same time, the GuocoLand-Hong Leong JV submitted a proposal of $779.6 million for the 344,700 sq ft site along Upper Thomson Road. The rate translates to $905 psf ppr.
URA has granted the tender for 2 recently shut government land sale (GLS) spots. A non commercial site at Zion Road was awarded to a joint project (JV) between City Developments Ltd (CDL) and Mitsui Fudosan, while a different GLS location at Upper Thomson Roadway was granted to a JV within GuocoLand and Hong Leong Holdings.
The $905 psf ppr bid put in by GuocoLand-Hong Leong is “reasonable” as it is a much bigger area compared to the Zion Road plot, says Yip, adding in: “Therefore the quantum is larger, and with a bigger quantum the possibilities are similarly bigger also”.
Mark Yip, Chief Executive Officer of Huttons Asia, claims that the eye-watering cost for the site is a “big commitment in the face of high rate of interest. Thinking about these risks, the quote of $1,202 psf ppr is fair”.
