A press release by URA dated April 22 stated that an unidentified developer had triggered the release and sale of a residential property, called Zion Road (ParcelB), via public tender.
The Zion Road plot (Parcel B), is a Reserve Site on the Government Land Sales (1H2024) Programme. Reserve List sites are not immediately released to tender but initially made available for applications. Only after a developer has submitted a valid application and a price that is acceptable will it be released for tender.
In this instance, the site was triggered after the unnamed developer submitted a price not less than $604.57 million.
The 99-year leasehold property occupies 0.9ha, and it is expected that up to 610 residential units will be built. Based on a maximum permitted gross floor space (GFA) (approximately 559.744 sq ft), the application price is about $1.080 per square foot (psf) per plot ratio.
The site is located near Great World City (Great World MRT station), Zion Riverside Food Centre (River Valley Primary School) and Great World City .
URA accepting this bid is not surprising as it’s lower than the winning price for an adjacent Zion Road parcel (Parcel B) awarded earlier in the month to a partnership between Singapore listed property group City Developments with Japanese real estate developer Mitsui Fudosan. The joint venture had submitted a single bid of $1.107billion. The 99-year leasehold is the first site to test long-stay serviced residences with a stay minimum of three months.
The Zion Road site (Parcel A), and the adjacent residential plot in River Valley Green, (Parcel A), were recently awarded.
It could be a sign of developers’ confidence that home buyers will flock to the area given its attractive location near two MRT station and amenities, such as Great World City.
In the current market climate, it is possible that the developer who activated the Reserve List could also be taking advantage of the opportunity to purchase the plot for a reduced price.
Site activation may be an indication of developer confidence, particularly if the site is pure residential and does not have a serviced apartments component. Selling residential properties is easier and less risky than starting a brand new business.
Developers could also see that the sites on Zion Road have potential and there is a sufficient demand for housing in the area despite the River Valley Green site (Parcel A).
Due to the fact that recent land tenders at Orchard Boulevard (Parcel A), Zion Road, and Orchard Road were disappointing and offered at conservative prices the next land bids are likely to be more moderate. Zion Road (Parcel B), for example, is expected to get two or three offers, with the highest price being around $1.150 – $1.250 psf.
There could also be up to three bidders for Zion Road (Parcel A), with the highest bid being between $1100 and $1200 psf.
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