by OrangeTee & Tie Pte Ltd.

OrangeTee's comments on tender closing at Zion Road (Parcel A) and Upper Thomson Road (Parcel B)

Government Land Sales

The Urban Redevelopment Authority (URA) has just closed the tender for Zion Road (Parcel A) and Upper Thomson Road (Parcel B). The tender for these parcels were launched on 4 December 2023. The plot at Zion Road (Parcel A) may yield around 735 conventional housing units and 435-500 units of Long-Stay Serviced Apartments, while the plot at Upper Thomson Road (Parcel B) may yield 940 units.

Zion Road (Parcel A)

There was one bid from CDL-MFA Vega Property Pte. Ltd. and CDL-MFA Altair Property Pte. Ltd., at a bid of S$ 1,106,888,000 or S$1,202 psf ppr. This is the first tender to close which contains the new Long-Stay Serviced Apartments (SA2). While there is great potential for developers to gain a base of recurring income with the management of the serviced apartments, there is no precedent to this type of housing given the new housing requirements for SA2 homes from normal serviced apartments. With the rents moderating, there may be a preference to develop purely residential projects instead. However, the minimum GFA required for the SA2 units is 20,000 sqm out of 85,551 sqm, or around 24% of the total GFA of this project, despite the large estimated unit count proportion. The tender launch of the River Valley Green (Parcel A) land tender nearby may also give developers more alternatives in the area as it is purely residential site which is easier to build and manage. Moreover, the Zion Road (Parcel A) site is bigger, which translates to a larger capital outlay.

Nevertheless, the site is attractive given the excellent location which is close to many amenities and near the CBD. There is also 2,400sqm of commercial space, inclusive of a 600 sqm childcare centre, and the project will be integrated with the Havelock MRT station on the TEL. The other existing projects in the area that have not reached TOP, such as Irwell Hill Residences and The Avenir, have either very few units left or are fully sold out.

Upper Thomson Road (Parcel B)

There was one bid from GuocoLand (Singapore) Pte. Ltd. snd Intrepid Investments Pte. Ltd., at a bid price of S$779,555,000 or S$905 psf ppr. The plot received fewer bids than anticipated as there is the adjacent site in Parcel A which is smaller, and also nearer to the MRT. Moreover, Parcel B is located directly next to the expressway. Developers looking for recurring income from the Long-Stay Serviced Apartments may have the option to consider the adjacent Parcel A plot which closes on 19 June 2024. This site also features a unique conservation element that is included in the overall GFA, which may add complexity to the project.

Nonetheless, the conservation building within the development may allow the developer to express greater creativity, and come up with a more unique project concept. The different height zonings within the site will also offer the developer further creativity in structuring the building massing. Moreover, there is also a park area flanking the western part of the site, which can offer greenery views. The site also enjoys close proximity to Springleaf MRT station, and will also have immediate vehicular connectivity to the SLE. The successful sales launch at Lentor Mansion recently still shows that there is appetite for homes with unique concepts and price accessibility in the OCR.

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