Wing Tai Holdings submits top bid of $1,325 psf ppr for residential GLS site at River Valley Green

River Valley Green (Parcel A) has a maximum gross floor area of 350,035 sq ft and could yield up to 380 units.

Winchamp Investment, a subsidiary of Wing Tai Holdings, submitted the highest bid of $464 million for the 99-year leasehold government land sales (GLS) site at River Valley Green (Parcel A). Wing Tai’s bid for the 100,009 sq ft site translates to a land rate of $1,325 psf per plot ratio (ppr).

The tender attracted one other bid from Hong Realty, a subsidiary of Hong Leong Group, which put in a bid price of $444.89 million or $1,271 psf ppr.

River Valley Green (Parcel A) has a plot ratio of 3.5 and a maximum gross floor area of 350,035 sq ft, and the new development could yield up to 380 units. The site is adjacent to Great World City MRT Station on the Thomson-East Coast Line and it is close to Great World City.

Wong Siew Ying, head of research and content at PropNex Realty, points out that Wing Tai’s bid of $1,325 psf ppr is higher than the $1,202 psf ppr that City Developments Ltd (CDL) and Mitsui Fudosan submitted for another GLS site on Zion Road in April.

“Despite being the smallest site in terms of land area among the four GLS sites that the government has made available for tender in the River Valley and Zion Road areas, as well as its proximity to the Great World City Mall and MRT station, this site drew only two bids” says Marcus Chu, CEO of ERA Singapore. He adds: “This seems to indicate that developers are treading carefully when acquiring land”.

Leonard Tay, head of research at Knight Frank Singapore, concurs and he cites the high interest rate environment and prevailing cooling measures for the “continued lack of appetite” from developers to bid for some available GLS sites.

Mark Yip, CEO of Huttons Asia, adds that developers would have to consider the impact that the potential supply of 1,300 new homes from the recently awarded site at Zion Road (Parcel A) and another GLS site at Zion Road (Parcel B), whose tender closes next month, before deciding to throw their hat in the ring.

Another nearby site at River Valley (Parcel B) is on the Reserve List - if it is triggered and awarded, it could potentially inject an additional 360 homes and 220 long-stay serviced apartments (SA2).

Recent new projects in the vicinity include the Irwell Hill Residences, a 540-unit development by CDL, and The Avenir, a 376-unit freehold project developed by Hong Leong Holdings, Guocoland, and Hong Realty. According to URA caveats, Irwell Hill Residences is 99.6% sold and The Avenir is fully sold.

If the site is awarded to Wing Tai based on the land rate of $1,325 psf ppr, the developer could face an estimated breakeven costs ranging from $2,300 psf to $2,500 psf, says Chia Siew Chuin, head of residential research at JLL.