GuocoLand-Hong Leong JV submit sole bid for Upper Thomson Road GLS site at $905 psf ppr

GuocoLand and Hong Leong Holdings formed a joint venture (JV), placing the sole bid for an Upper Thomson Road residential Government Land Sales (GLS) site at $779.6 Million on April 4. Their bid price equates to $905 psf per plot ratio (ppr).

Upper Thomson Road (Parcel B) land parcel was bid at 7.8% below what a consortium consisting of Hong Leong Holdings, GuocoLand, and CSC Land Group submitted in September for Lentor Central GLS site located 1.8km away; today’s closed auction on Upper Thomson Road GLS site marks one of many GLS auctions held around Singapore.

Hong Leong Holdings, GuocoLand and CSC Land Group’s consortium bid of $435.11 million ($982 per sqf per year) for Lentor Central was accepted. A second offer from Frasers Property totaling $410.8 million ($927 psf ppr).

GLS site at Upper Thomson Road (Parcel B) is expected to yield 940 residential units, but with its unique conservation element included as part of the overall GFA, may add complexity and enable developers to come up with unique project concepts.

URA launched Upper Thomson Road (Parcel A), an adjacent 262,875 sq ft site zoned for residential use with commercial on its first storey, for tender in December. This property is expected to produce 640 housing units including 100 long-stay serviced apartments as well as 21,528 sq ft of commercial space and its tender will close on June 19.

Last December when Upper Thomson Road (Parcel B) went up for tender, most market watchers expected GLS’ site to attract up to five bids from prospective bidders; instead it received only two.

Chia Siew Chiun, Head of Residential Research and Consultancy at JLL states this finding as evidence of both low interest levels among developers as well as their caution in taking risks with projects in such quiet locations with few amenities nearby. Conservancy requirements could incur additional development costs while there may not be enough amenities nearby, she notes.

Parcel A is smaller in comparison with Parcel B, and located near Springleaf MRT station. “Developers looking for long-stay serviced apartments may consider purchasing Parcel A’s site nearby for its recurring income potential,” noted Forbes.

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Guocoland attributes its lack of interest in this site to its relatively untested location: “This will be the first high-rise condo development of this type in this area and few developers may be willing to take on such a large site – however Guocoland is familiar with demographics and housing requirements in this part of Texas and could replicate its success in Lentor estate.”

Upper Thomson Road (Parcel B) GLS site’s tender closed on the same day as that for Zion Road GLS site and City Developments Ltd submitted its sole bid of $1.107 billion ($1,202 psf ppr). This marks CDL as the pioneer to implement government’s long-stay serviced apartment scheme last November.

GuocoLand-Hong Leong JV may gain a first mover advantage by purchasing Upper Thomson Road parcel B and becoming the first land owner in Springleaf precinct if granted an award of the Upper Thomson Road (Parcel B). Acquiring land in Springleaf may give them control of shaping its development while potentially altering market dynamics for subsequent land sales in its vicinity.

Lian Soon Holdings, OKP Land and HSB Developments were awarded a non-landed GLS site on Chuong Kuo Road in 2018; the site was developed into the 84-unit The Essence condominium by Lian Soon Holdings, OKP Land and HSB Developments.

Due to a dearth of new condo launches in Upper Thomson Road (Parcel B), this project may meet pent-up demand.

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