A residential site located at Zion Road (Parcel B) has been triggered for sale by a property developer, with the site expected to be launched for public tender next month, according to a press release from the Urban Redevelopment Authority (URA) dated April 22.
Lee Sze Teck, Senior Director of Data Analytics at Huttons Asia, anticipates that around three property developers may participate in the tender for the Zion Road (Parcel B) site. The top bid for the site is expected to range between $1,100 and $1,200 per square foot per plot ratio (psf ppr).
Lee also notes that the developer who triggered the Reserve List site might be looking to secure the plot at a competitive rate, given the current cautious market sentiment.
The 99-year leasehold site spans 0.9 hectares and is expected to yield up to 610 private residential units. With a maximum gross floor area (GFA) of approximately 559,744 square feet, the application cost translates to a land price of about $1,080 psf ppr based on the GFA. The site is strategically located near the Great World and Havelock MRT stations, as well as amenities like Great World City, Zion Riverside Food Centre, and River Valley Primary School.
However, Wong Siew Ying, Head of Research and Content at PropNex Realty, expressed surprise at the early triggering of the Zion Road (Parcel B) site, especially considering the recent tender award for the adjacent Zion Road (Parcel A) site and the ongoing tender for a nearby residential plot at River Valley Green (Parcel A). Wong suggests that this early activation may indicate developers’ confidence in the demand for residential properties in this area, given its prime location near key amenities and transport links.
The URA’s approval of the minimum bid price is not unexpected, Wong adds, considering that it is lower than the winning bid for the adjacent Zion Road (Parcel A) site. Earlier this month, a joint venture between Singapore-listed City Developments and Japanese developer Mitsui Fudosan successfully secured that plot with a single bid of $1.107 billion. The 99-year leasehold site is the first in the area to pilot long-stay serviced apartments with a minimum stay of three months and can accommodate up to 1,170 residential units, including 435 serviced apartments.
In this case, the Zion Road (Parcel B) site was triggered for tender after an unnamed developer submitted a bid not less than the minimum price of $604.57 million.
“Developers may see strong potential in the Zion Road sites and believe there is sufficient demand for residences in the area, despite possible competition from the River Valley Green (Parcel A) site,” Lee remarks.
The Zion Road (Parcel B) plot is part of the 1H2024 Government Land Sales (GLS) program’s Reserve List. Sites under the Reserve List are not immediately released for tender but are available for application. A site is put up for tender only when a developer applies with an acceptable minimum price.
Given the recent land tender outcomes at Zion Road (Parcel A) and Orchard Boulevard, which Wong describes as “lackluster” and awarded at “relatively conservative prices,” she expects that future land bids might moderate. Wong anticipates the Zion Road (Parcel B) site to attract two or three bids, with the highest bid likely to be in the range of $1,150 to $1,250 psf ppr.
Lee agrees that the triggering of the Zion Road (Parcel B) site may reflect developers’ confidence in the property market, especially for a purely residential site compared to one with a long-stay serviced apartment component. “Selling residential homes is more straightforward and carries fewer risks compared to embarking on a newer venture,” he observes.