URA awards Zion Road site to CDL-Mitsui Fudosan JV, and Upper Thomson Road site to GuocoLand-Hong Leong JV
Mark Yip, CEO of Huttons Asia, states that the eye-watering price for the site is a “significant dedication in the face of high rate of interest. Considering these threats, the bid of $1,202 psf ppr is reasonable”.
” At a land cost of S$ 1,202 psf ppr, the breakeven cost can potentially extend in between S$ 2,400 psf and S$ 2,600 psf basing on technical, material and design factors, with launch prices beginning with S$ 2,700 psf,” claims Alice Tan, head of consultancy at Knight Frank Singapore. She adds that the brand-new project might launch at about S$ 3,000 psf and this price would not only be palatable, yet appealing for Singaporean homebuyers and long-term citizens, whether for work or investment.
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. Similarly, the GuocoLand-Hong Leong JV also sent the sole offer for the Upper Thomson Roadway GLS location when that tender closed on April 4. Eugene Lim, essential executive officer, ERA Singapore, commented that both GLS spots are relatively ‘untried’. “The government may have taken into consideration the tender rates provided for these spots to be sensible, considering the problems that these designers are prepared to take on,” he states.
The JV affiliates have already indicated that they mean to create the location right into a mixed-use property consisting of two housing blocks, one that is 69 floors and the some other 64 floors, with around 740 home devices available in total. The planned project will also make up a retail platform, and a 35-storey block with regarding 290 rental home units.
Wong Siew Ying, head of research and content at PropNex Realty, notes that although the land rates were below market assumptions URA likely considered other factors in analyzing the quotes. “For example, the Upper Thomson Road plot being in a reasonably untried new housing district, and the Zion Roadway plot being the first development to comprise the long-stay serviced flats,” she claims.
This was echoed by Tricia Song, head of research study, Singapore and Southeast Asia, CBRE. She notices that the quote for the Zion Road site is a “significant” 30% lower than the comparable land parcel across the road, which has been become the 455-unit Riviere. “The approval of the lower-than-expected proposal cost in spite of its being the sole bid, is a recognition that market problems have actually transformed over the last 5-6 years given that the bordering location was granted, given factors such as enhanced ABSD, higher building costs, funding prices, along with danger premium for the (long-stay serviced apartments) element which is a brand-new asset course,” says Song.
Tan foresees that the brand-new development may see a possible launch start-off cost of just under S$ 2,000 psf. “As the Upper Thomson Roadway Parcel B spot would certainly be the very first in a rather underdeveloped region without high-rise houses, there is some very first mover advantage in a beautiful district,” she says.
Blossoms By The Park condo floor plan
URA has recently granted the tender for two just recently closed government land sale (GLS) locations. A housing site at Zion Roadway was awarded to a joint venture (JV) between City Developments Ltd (CDL) and Mitsui Fudosan, while a different GLS spot at Upper Thomson Road was granted to a JV between GuocoLand and Hong Leong Holdings.
The $905 psf ppr bid placed in by GuocoLand-Hong Leong is “fair” as it is a much larger location compared to the Zion Road plot, states Yip, including: “For this reason the quantum is larger, and with a larger quantum the chances are similarly bigger as well”.
On the other hand, the GuocoLand-Hong Leong JV sent a bid of $779.6 million for the 344,700 sq ft area around Upper Thomson Road. The cost translates to $905 psf ppr.
According to a GuocoLand spokesperson: “The Upper Thomson Road spot is situated in a premium landed housing spot, similar to the Lentor Hills estate which we have established as a new premium exclusive residence estate with our developments such as Lentor Modern and Lentor Mansion. We are excited to have the chance to boost another new neighbourhood at Springleaf via our placemaking abilities. The future development, which is served by the Springleaf MRT station on the Thomson-East Coast Line, are going to have about 940 units.”
CDL and Mitsui Fudosan sent a $1.107 billion offer for the 164,439 sq ft spot, which translates to $1,202 psf per plot ratio (ppr). The site has a plot ratio of 5.6 and is zoned residential with industrial on the first floor. The new development could yield approximately 1,170 new non commercial units. This is also the very first location released by the government that featured units under the new long-lasting serviced apartment program.
