CDL joint venture’s offer for Zion Road site is 30.6% lower than cost of last state land plot sold in River Valley area
THE latest state tender closing in the Upper Thomson area showed developers sitting out land sales as caution prevails in the market.
The site drew just one bid – a joint venture between GuocoLand and Hong Leong Holdings, with an offer of around S$780 million or S$904.60 per square foot per plot ratio (psf ppr).
The sole offer came in just under expectations polled by The Business Times before the tender closed on Thursday (Apr 4). Consultants had expected the plot to fetch three to five bids, with the highest bid ranging between S$1,000 and S$1,100 psf ppr.
The land rate is also 8 per cent lower than that of Lentor Central. The site was awarded in September 2023 to a joint venture between Hong Leong Holdings, GuocoLand and China Construction (South Pacific) Development Co for S$435.2 million or S$982 psf ppr.
Given the bid of S$905 psf ppr for the site, analysts expect the Upper Thomson (Parcel B) project to be launched between S$2,000 and S$2,200 psf.
A City Developments Ltd (CDL)-Mitsui Fudosan tie-up placed the sole bid in the tender for a site in Zion Road, which will be the first of its kind to pilot a new category of long-stay serviced apartments.
The Singapore listed property group and the Japanese real estate developer made a S$1.1 billion bid for the site, which sits on the fringe of the prime River Valley residential district and close to Orchard Road. The parcel would yield over 1,000 residential units.
The bid of S$1,202 per square foot (psf) per plot ratio (ppr) fell below the S$1,300 to S$1,700 psf ppr that most analysts polled by The Business Times expected. They had expected to see up to three bids.
GuocoLand-Hong Leong bid for Upper Thomson parcel is 8% under recently sold Lentor plot
THE latest state tender closing in the Upper Thomson area showed developers sitting out land sales as caution prevails in the market.
The site drew just one bid – a joint venture between GuocoLand and Hong Leong Holdings, with an offer of around S$780 million or S$904.60 per square foot per plot ratio (psf ppr).
The sole offer came in just under expectations polled by The Business Times before the tender closed on Thursday (Apr 4). Consultants had expected the plot to fetch three to five bids, with the highest bid ranging between S$1,000 and S$1,100 psf ppr.
The land rate is also 8 per cent lower than that of Lentor Central. The site was awarded in September 2023 to a joint venture between Hong Leong Holdings, GuocoLand and China Construction (South Pacific) Development Co for S$435.2 million or S$982 psf ppr.
Given the bid of S$905 psf ppr for the site, analysts expect the Upper Thomson (Parcel B) project to be launched between S$2,000 and S$2,200 psf.
Summary
The latest tenders definitely reflected caution as both sites are in locations that still have amply supply.
While developers are keen to land bank, the ABSD levied on foreigners have kept this segment of buyers out of the market resulting in slower sales for projects in the central area. Further the serviced apartments requirement may have kept other players out of the market due to unfamiliarity in this business. As such, if the tender is awarded, the consortium will have to be mindful of launch prices in order to attract Singaporeans and Permanent Residents.
For the Upper Thomson site, it does not come as a surprise to receive a lower bid price than Lentor. This is primarily because there is still supply of around 30% from the current Lentor launches while there is an estimated 2,500 units from future GLS in Lentor.