Tenders launched for three GLS sites at Zion Road and Upper Thomson Road; another site available for application
/ EdgeProp Singapore |
Map showing Zion Road Parcel A (bottom, in blue) and Parcel B (top, in blue) (Picture: EdgeProp Landlens)
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SINGAPORE (EDGEPROP) - Four residential sites at Upper Thomson Road (Parcels A & B) and Zion Road (Parcels A & B) have been released for sale today under the 2H2023 Government Land Sales (GLS) programme, according to a Dec 4 press release by URA. Both sites at Upper Thomson Road and Zion Road (Parcel A) have been launched for tender under the Confirmed List, while Zion Road (Parcel B) is available for application under the Reserve List.
Two sites – Zion Road (Parcel A) and Upper Thomson Road (Parcel A) – include a new class of long-stay serviced apartments that have a minimum stay requirement of three months. Minister for National Development Desmond Lee first revealed the pilot sites at the Real Estate Developers’ Association of Singapore’s (Redas) 64th Anniversary Dinner on Nov 29.
In its press release, URA says the new category will expand the range of housing options available and ensure serviced apartments can cater to demand for longer-term stays. Similar to existing serviced apartments with a seven-day minimum stay requirement, long-stay serviced apartments cannot be strata subdivided for sale.
The pilot sites at Zion Road (Parcel A) and Upper Thomson Road (Parcel A) will potentially yield 535 long-stay serviced apartments and around 1,275 conventional residential units. The sites are next to Havelock and Springleaf MRT Stations respectively on the Thomson-East Coast Line.
Zion Road (Parcel A) measures 1.51 ha and is zoned for residential use with commercial at the first storey. The 99-year leasehold site has a gross plot ratio of 5.6 and can yield 1,170 housing units, including 435 long-stay serviced apartments and an estimated 25,833 sq ft of commercial space.
Upper Thomson Road (Parcel A) spans 2.44 ha and is zoned for residential use with commercial at the first storey. The 99-year leasehold site has a gross plot ratio of 2.2 and can yield 640 housing units, including 100 long-stay serviced apartments and an estimated 21,528 sq ft of commercial space.
The adjacent Upper Thomson Road (Parcel B) site measures 3.2 ha and is zoned for residential (non-landed) use. The 99-year leasehold site has a gross plot ratio of 2.5 and can yield 940 housing units.
According to URA, the two sites mark the introduction of a new neighbourhood in the Springleaf precinct. “Current and future residents can look forward to more amenities in the area and improved pedestrian accessibility to the new Springleaf MRT Station.”
Given their location close to the Central Catchment Nature Reserve, the development of the two Upper Thomson Road sites will consider the area's ecological context and heritage, says URA. The successful bidders for the two Upper Thomson Road parcels must incorporate “biodiversity-sensitive urban design strategies” in their proposed developments. They are also “strongly encouraged to propose innovative proposals that meet or exceed typical planning and urban design requirements”.
The successful tenderer for Upper Thomson Road (Parcel B) will also be required to integrate the conserved building of the former Seletar Institute, which sits at the site, with their proposed development.
Meanwhile, Zion Road (Parcel B) is a 0.92 ha site next to Zion Road (Parcel A). Zoned for residential (non-landed) use, the plot has a tenure of 99 years and a gross plot ratio of 5.6. It can yield 610 units.
Map showing Upper Thomson Road (Parcel A) (top, in blue), which is adjacent to Upper Thomson Road (Parcel B) (bottom, in blue) (Source: EgdeProp LandLens)
Potential response from developers
Lee Sze Teck, senior director of data analytics at Huttons Asia, notes that bidders for the two long-stay serviced apartment pilot sites may be limited to bigger developers with the ample liquidity and expertise required to fund and operate such assets. “The separate strata titles for the residential and serviced apartments will make it attractive to developers who may look to divest the serviced apartments to their REITs,” he adds.
Wong Siew Ying, head of research and content at PropNex Realty, observes that Zion Road (Parcel A) is the most attractive among the three sites launched for tender, given its location close to amenities such as Great World City and Orchard Road malls. She also points out that the last GLS site sold in the area – the current site of the 455-unit Rivière on Jiak Kim Street – garnered 10 bids. The site was awarded to Frasers Property at $1,733 psf ppr in December 2017.
She believes the large quantum required for Zion Road (Parcel A) may result in fewer bids. “It is very likely that we will see developers partnering up, potentially with a party with hospitality experience, to bid for the site,” she says. She anticipates the site to see two to three bids, with a top coming in at around $1.47 billion to $1.66 billion, which works to a land rate between $1,600 and $1,800 psf ppr.
The launch of Zion Road (Parcel A) will likely temper appetite for the neighbouring Parcel B site on the Reserve List, Wong adds. “While this plot [Zion Road (Parcel B)] is attractive, we do not expect it to be triggered for release anytime soon, given the oncoming supply at the adjacent Parcel A site.”
For the Upper Thomson Road sites, Wong notes that the plots could provide an opportunity for developers to gain a first-mover advantage in a less developed area. On the flip side, the lack of comprehensive amenities and schools in the area may pose a risk.
In any case, she expects developers to approach both Upper Thomson Road sites cautiously, given the large supply of new private homes in the Lentor Hills area, just one MRT stop away from the Springleaf station.
The most recent GLS site sold in the vicinity was a plot at Lentor Central, which was awarded in September for $435 million ($982 psf ppr) to a consortium comprising Hong Leong Holdings, GuocoLand and CSC Land Group. Closer to Upper Thomson Road, another GLS site at Chong Kuo Road was awarded in February 2018 to Lian Soon Holdings and OKP Land for $43.95 million ($681 psf ppr).
Huttons’ Lee notes that the Springleaf area, which currently comprises predominantly landed housing, has yet to be tested in terms of demand for serviced apartments; he says developers will have to price in “significant risks” for Parcel A. However, the plot is smaller than Parcel B, thus requiring a smaller outlay from developers, which may boost its appeal.
PropNex’s Wong concurs, adding that Upper Thomson Road (Parcel A)’s direct integration with the Springleaf MRT Station, along with its commercial and serviced apartment components, give it an edge over Parcel B. “Based on market observations, such integrated developments (for example, Lentor Modern) tend to find favour with home buyers, and as such could see greater interest from developers,” she adds.
In addition, the need to preserve the conserved Seletar Institute building may prompt developers to bid more conservatively for Upper Thomson Road (Parcel B) as integration works may push up development costs.
Wong anticipates Upper Thomson Road (Parcel A) to garner up to five bids with a top bid of around $636 million to $723 million ($1,100 to $1,250 psf ppr). She believes the Upper Thomson Road (Parcel B) site could attract up to three bids, with a top bid price of $862 million to $948 million ($1,000 to $1,100 psf ppr).
The tenders for Upper Thomson Road (Parcel B) and Zion Road (Parcel A) sites will close at 12pm on April 4, 2024, while the tender for Upper Thomson Road (Parcel A) will close on June 19, 2024.
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