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), with GuocoLand being its sole bidder, to win an Upper Thomson Road residential GLS site for $779.6 Million when tender closed on April 4. Their price translates into $905 psf per plot ratio (ppr).

Upper Thomson Road (Parcel B) closed today at 7.8% below the price submitted by Hong Leong Holdings, GuocoLand and CSC Land Group consortium as Lentor Central GLS site which closed last September – that site being located 1.8km from where Upper Thomson Road GLS site closed today.

Hong Leong Holdings, GuocoLand and CSC Land Group together submitted a winning bid of $435.1 million ($982 psf ppr) for Lentor Central residential site at Lentor Centre. Frasers Property submitted second place bid of $410.8 million ($927 psf ppr).

GLS at Upper Thomson Road (Parcel B) is projected to produce up to 940 housing units; however, due to an unique conservation element included in its GFA calculations. This may add complexity and allow developers to come up with innovative project concepts.

URA recently issued an auction tender for Upper Thomson Road (Parcel A), an adjoining 262,8875-square-foot site zoned for residential use with commercial at its first storey – estimated to yield 640 housing units including 100 long-stay serviced apartments as well as 215,28 square feet of commercial space – on December 18. That tender is due to close on June 19.

Last December when Upper Thomson Road (Parcel B) went up for bid, many market observers predicted the GLS site would draw five bids or more; instead it received only three.

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Chia Siew Chiun, head of residential research and consultancy at JLL notes this trend as evidence of both low developer interest and cautious stance. She highlights conservation requirements as an additional cost in development projects while the relatively tranquil location lacks comprehensive amenities that may attract prospective purchasers.

Parcel A is smaller in comparison with Parcel B and located close to Springleaf MRT station. Developers seeking long-stay serviced apartment revenue streams should explore developing on this plot of land nearby.

Attributes the lack of enthusiasm surrounding this site to its relatively untested location: high-rise condo will be first of its kind (in this area), and not many developers may have the appetite for such an endeavor; however, Guocoland knows about demographics and housing requirements well enough in this region to replicate its success with Lentor estate development.

Upper Thomson Road (Parcel B) closed for tender on the same day as Zion Road and City Developments Ltd (CDL) submitted the sole bid of $1.107 billion ($1,202 psf ppr). It marks the first GLS site to pilot long-stay serviced apartments scheme introduced by government last November.

GuocoLand-Hong Leong JV could gain an early mover advantage by purchasing Upper Thomson Road parcel B and becoming the first land owner within Springleaf precinct, potentially altering future development plans in this part of Singapore, as well as changing market dynamics for subsequent sales in that vicinity.

Lian Soon Holdings, OKP Land and HSB Developments were awarded the last non-landed GLS site near Chuong Kuo Road for development into an 84-unit condominium called The Essence by Lian Soon Holdings, OKP Land, and HSB Developments in 2018.

Given a shortage of new condo launches in this locale, Upper Thomson Road (Parcel B) could capitalize on pent-up demand for something different in this location.

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