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 a residential Government Land Sales (GLS) site along Upper Thomson Road. When tender closed on April 4th, they submitted their bid of $779.6 Million; which translated to an average per-square-foot price of $905 ppr (per plot ratio).

Upper Thomson Road (Parcel B) saw bids that are 7.8% below those submitted by Hong Leong Holdings, GuocoLand and CSC Land Group as part of their consortium bid at Lentor Central last September for another GLS site, about 1.8km away from where Upper Thomson Road GLS Site closed today.

Hong Leong Holdings, GuocoLand and CSC Land Group submitted the highest bid of $435.1 million ($982 psf ppr). Frasers Property submitted a second offer of $410.8 million ($927 psf ppr).

GLS site at Upper Thomson Road (Parcel B) is projected to produce up to 940 housing units; however, due to a unique conservation element included in the GFA calculation process, this may add complexity to the project while encouraging developers to come up with innovative project concepts.

URA also recently put forward for tender an adjacent 262,875 sq ft site – Upper Thomson Road (Parcel A) – zoned for residential use with commercial space on its first-storey; that site should yield approximately 640 housing units including 100 long-stay serviced apartments as well as an estimated 21,528 sq ft of commercial space, while closing on June 19. Tender for this parcel A will close on June 19.

Last December when Upper Thomson Road (Parcel B) went up for bid, most market watchers anticipated that GLS site might receive five bids or so; instead it received far fewer.

Chia Siew Chiun, head of residential research and consultancy at JLL notes this as evidence of both low interest from developers as well as their cautious stance towards development projects in these locations. Conservation requirements may incur additional development costs while an absence of nearby amenities contribute to overall low levels of interest among potential purchasers, according to her.

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Parcel A is smaller in comparison with Parcel B and lies closer to Springleaf MRT station; therefore developers looking for long-stay serviced apartments as a source of recurring income should seriously consider purchasing its adjacent plot of land.”

Attributes the lack of interest to its unproven location. “Guocoland knows both demographics and housing requirements in this region and could replicate its success with Lentor estate.”

On November 8, a GLS site at Upper Thomson Road (Parcel B) in Singapore officially closed for tendering with City Developments Ltd (CDL) submitting the sole bid of $1.107 billion ($1,202 psf per parcel), making this GLS site one of the first pilot sites for long-stay serviced apartments under government initiatives introduced last November.

GuocoLand-Hong Leong JV could gain an early edge by purchasing Springleaf Precinct land parcel B at Upper Thomson Road and taking control of development in this precinct, potentially setting the market dynamics for subsequent sales in this vicinity.

Last non-landed GLS site awarded in the region was Chuong Kuo Road in 2018, which was given to a consortium of boutique developers from Lian Soon Holdings, OKP Land and HSB Developments and later transformed into The Essence condominium by Lian Soon Holdings, OKP Land and HSB Developments.

Due to a dearth of new condo launches in this location, Upper Thomson Road (Parcel B) could capitalize on unmet demand for new units in this neighborhood.

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