SINGAPORE – The Urban Redevelopment Authority (URA) has released a Zion Road site for sale from its reserve list, after receiving an application committing to a bid not lower than about $604.6 million.
The launch of the tender for Zion Road (Parcel B) comes on the heels of URA’s recent sale of a larger neighbouring site in Zion Road, which was awarded to a City Developments Limited-Mitsui Fudosan (CDL-Mitsui) joint venture (JV) at its sole bid of $1.1 billion, or $1,202 per sq ft per plot ratio (psf ppr).
CDL-Mitsui’s bid for the Parcel A site was both below expectations and 30 per cent lower than a comparable state land site across the road.
Zion Road (Parcel B) comes out of the reserve list in the Government Land Sales (GLS) programme for the first half of 2024. Reserve list plots are released for sale only if a developer puts in an offer of a minimum price that is acceptable to the Government and if there is sufficient market interest.
The reserve Zion Road site, which can yield about 610 new private homes, was triggered for sale after a developer made an application to commit to submit a bid at the minimum price of $604,567,890, URA said. It did not disclose the identity of the developer.
The minimum price of $604.6 million translates to a land rate of about $1,080 psf ppr, which is 10 per cent lower than Parcel A’s $1,202 psf ppr price, said Ms Tricia Song, CBRE’s head of research for Singapore and South-east Asia.
“In our opinion, this is a very attractive minimum land rate, notwithstanding the weak appetite of developers recently,” she said.
The second Zion Road site is smaller than the first one sold, and does not come with a requirement to build a new category of serviced apartments – called SA2 – as part of the development.
“Without the SA2 component and at about 60 per cent of the GFA (gross floor area) of Parcel A, Parcel B poses lower development risk and should warrant a higher land rate. We expect the CDL-Mitsui JV to be interested in defending the area, and more developers to be interested in this plum site,” said Ms Song.
CBRE anticipates that there could be three to four bids for the plot, with a top bid price of $1,300 psf ppr to $1,380 psf ppr, or about $730 million to $770 million.
The land parcel in Zion Road has a site area of 9,285.9 sq m and a maximum gross floor area of 52,002 sq m.
The tender comes amid plans by the Government to make 5,450 residential units available via the confirmed list of the first-half 2024 GLS programme. This is the largest supply of confirmed list units since the second-half 2013 GLS programme.
The tender will close in July 2024. THE BUSINESS TIMES
