Wong Siew Ying, Head of Research and Information at PropNex Realty, highlights that although the land prices were lower than market expectations, the Urban Redevelopment Authority (URA) likely considered multiple factors in evaluating the bids. “For instance, the Upper Thomson Road site is located in a relatively undeveloped residential area, while the Zion Road plot will be the first development to feature long-stay serviced apartments,” she explains.
Tan predicts that the new development could potentially launch at prices just below S$2,000 per square foot (psf). “As the Upper Thomson Road Parcel B site will be the first in a relatively undeveloped area without high-rise residences, there is a significant first-mover advantage in this scenic district,” she notes.
A spokesperson from GuocoLand adds: “The Upper Thomson Road site is situated in a predominantly landed housing area, similar to the Lentor Hills estate, which we have developed into a premium residential estate with projects such as Lentor Modern and Lentor Mansion. We are excited about the opportunity to enhance another new area at Springleaf through our placemaking capabilities. The future development, which will be served by the Springleaf MRT station on the Thomson-East Coast Line, is expected to feature around 940 units.”
The joint venture partners have already indicated plans to develop the site into a mixed-use property, including two residential towers—one with 69 storeys and the other with 64 storeys—offering a total of about 740 residential units. The planned development will also include a retail podium and a 35-storey block with approximately 290 serviced apartment units.
Meanwhile, the GuocoLand-Hong Leong JV submitted a bid of $779.6 million for the 344,700 sq ft site along Upper Thomson Road, which translates to $905 psf per plot ratio (ppr).
The CDL-Mitsui Fudosan JV was the sole bidder for the Zion Road site when the tender closed on April 4. Similarly, the GuocoLand-Hong Leong JV also submitted the only bid for the Upper Thomson Road GLS site when its tender closed on the same day. Eugene Lim, Key Executive Officer at ERA Singapore, noted that both GLS sites are relatively “untested.” He remarked, “The government may have considered the tender prices submitted for these sites as reasonable, given the challenges these developers are willing to undertake.”
Tricia Song, Head of Research for Singapore and Southeast Asia at CBRE, echoed this sentiment, noting that the bid for the Zion Road site is a “significant” 30% lower than a comparable plot across the road, which has been developed into the 455-unit Riviere. “The acceptance of the lower-than-expected bid, despite being the sole offer, acknowledges that market conditions have changed over the past 5-6 years since the adjacent site was awarded, considering factors such as increased Additional Buyer’s Stamp Duty (ABSD), higher construction and financing costs, as well as the risk premium for the long-stay serviced apartments, which is a new property type,” Song explains.
Mark Yip, CEO of Huttons Asia, remarked that the bid for the Zion Road site represents a “significant commitment in the face of high interest rates.” He added, “Considering these risks, the bid of $1,202 psf ppr is fair.”
Yip also pointed out that the $905 psf ppr bid submitted by GuocoLand-Hong Leong is “reasonable” given that it is a much larger site compared to the Zion Road plot. “With a larger site, the potential risks and rewards are equally greater,” he added.
CDL and Mitsui Fudosan submitted a $1.107 billion bid for the 164,439 sq ft Zion Road site, which translates to $1,202 psf ppr. The site has a plot ratio of 5.6 and is zoned for residential use with commercial space on the ground floor. The new development could yield up to 1,170 residential units and is also the first site released by the government to include units under the new long-stay serviced apartment scheme.
“At a land price of S$1,202 psf ppr, the breakeven price could range between S$2,400 psf and S$2,600 psf, depending on technical, material, and design considerations, with launch prices starting from S$2,700 psf,” says Alice Tan, Head of Consultancy at Knight Frank Singapore. She adds that the new project could be priced around S$3,000 psf, which would be attractive to Singaporean buyers and long-term residents, whether for occupancy or investment purposes.
URA has awarded the tenders for two recently closed Government Land Sale (GLS) sites. The residential site at Zion Road was awarded to a joint venture (JV) between City Developments Ltd (CDL) and Mitsui Fudosan, while another GLS site at Upper Thomson Road was awarded to a JV between GuocoLand and Hong Leong Holdings.