SINGAPORE (EDGEPROP) - A joint venture (JV) comprising GuocoLand and Hong Leong Holdings has submitted the sole bid for a residential Government Land Sales (GLS) site along Upper Thomson Road. The JV partners submitted a bid of $779.6 million for the 344,700 sq ft site when the tender closed on April 4. The bid price translates to $905 psf per plot ratio (ppr).

The bid for the land parcel, named Upper Thomson Road (Parcel B), is 7.8% lower than the price submitted by a consortium consisting of Hong Leong Holdings, GuocoLand and CSC Land Group for a GLS site at Lentor Central last September. That GLS site is about 1.8km away from the Upper Thomson Road GLS site that closed today.

The Hong Leong Holdings, GuocoLand and CSC Land Group consortium submitted a winning bid of $435.1 million ($982 psf ppr) for the 158,264 sq ft residential site at Lentor Central. A second bid of $410.8 million ($927 psf ppr) was submitted by Frasers Property.

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The GLS site at Upper Thomson Road (Parcel B) is expected to yield up to 940 housing units. However, the site features a unique conservation element that is included in the overall GFA, says Justin Quek, CEO of OrangeTee & Tie. “This may add complexity to the project and allow the developer to come up with more unique project concepts,” he notes.

Next to Upper Thomson Road (Parcel B), URA also launched an adjacent 262,875 sq ft site, Upper Thomson Road (Parcel A), for tender last December. That site is zoned for residential use with commercial at the first storey. It is expected to yield 640 housing units including 100 long-stay serviced apartments and an estimated 21,528 sq ft of commercial space. The tender for Upper Thomson Road (Parcel A) will close on June 19.

When the tender of Upper Thomson Road (Parcel B) launched last December, most market watchers had expected the GLS site to attract up to five bids. But the site received fewer bids than anticipated.

This reflects both the low level of interest and the cautious stance of developers, says Chia Siew Chiun, head of residential research and consultancy at JLL. The conservation requirement may incur additional development costs, and the relatively quiet location lacks comprehensive nearby amenities, she says.

Quek says that the size of Parcel A is smaller compared to Parcel B, and that the Parcel A site is next to Springleaf MRT station. “Developers looking for recurring income from the long-stay serviced apartments may consider the adjacent Parcel A plot,” he says.

Marcus Chu, CEO of ERA Singapore, attributes the “muted interest” in the site to its relatively untested location. “The high-rise condo will be the first of its kind (in this area), and not many developers will have the appetite for the size of this site. However, Guocoland is familiar with the demographics and housing requirements in the area and could replicate its success in the Lentor estate,” he says.

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The tender for Upper Thomson Road (Parcel B) closed on the same day as another GLS site on Zion Road. City Developments Ltd (CDL) submitted the sole bid of $1.107 billion ($1,202 psf ppr) for the 164,451 sq ft site. It is the first GLS site to pilot the long-stay serviced apartments scheme introduced by the government last November.

If the Upper Thomson Road (Parcel B) is awarded to the GuocoLand-Hong Leong JV, acquiring the first land parcel in the Springleaf precinct could establish a first-mover advantage to shape the area’s upcoming development, and potentially influence the market dynamics for subsequent land sales in the vicinity, says Mohan Sandrasegeran, head of research and data analytics at SRI.

Sadrasegeran notes that the last non-landed GLS site awarded in the vicinity was at Chuong Kuo Road, which was awarded to a consortium of local boutique developers in 2018. The site was developed into the 84-unit The Essence condominium by Lian Soon Holdings, OKP Land and HSB Developments.

Given the lack of new condo launches in the area, the new project at Upper Thomson Road (Parcel B) could capitalise on pent-up demand for a new condo in this locale, says Sadrasegeran.

According to SRI, the new development could see a launch price between $2,000 psf to $2,200 psf, while ERA expects a range of between $2,000 and $2,100 psf. JLL expects a selling price from $2,100 psf.