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 submit the only bid for a residential GLS site along Upper Thomson Road. When tender closed on April 4, their offer of $779.6 million translated to an average per plot ratio price of $905 psf per plot ratio (ppr).

Upper Thomson Road (Parcel B) received bids that are 7.8% below those submitted by Hong Leong Holdings, GuocoLand and CSC Land Group as part of a consortium in September for another GLS site near Lentor Central – about 1.8km away from where today’s bid was closed.

Hong Leong Holdings, GuocoLand and CSC Land Group Consortium bid $435.1 Million ($982 psf per parcel rate) to win Lentor Central Residential Site Auction; Frasers Property also submitted an impressive bid of $410.8 Million (927 psf per parcel rate).

GLS site at Upper Thomson Road (Parcel B) is expected to produce up to 940 housing units; however, due to a unique conservation element included in its GFA calculation process. This may add additional complexity and allow developers to create unique project concepts more efficiently.

URA also released an adjacent 262,875 sq ft site known as Upper Thomson Road (Parcel A) for tendering last December, zoned for residential use with commercial at the first storey. It is projected to yield 640 housing units including 100 long-stay serviced apartments as well as approximately 21,528 sq ft of commercial space; URA plans on closing its tender for Upper Thomson Road (Parcel A) by June 19.

Last December when Upper Thomson Road (Parcel B) went out for tender, market observers expected GLS site to draw at least five bids; instead it received only three.

Chia Siew Chiun, head of residential research and consultancy at JLL notes this trend as evidence of both low interest levels among developers as well as their cautious nature. Conservation requirements may incur additional development costs while its relative isolation makes for limited amenities nearby, she points out.

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Parcel A is smaller in comparison with Parcel B and closer to Springleaf MRT station, making it attractive to developers seeking long-stay serviced apartments for long-term rental income. “Developers could consider purchasing and developing this plot.”

Guocoland attributes the low interest shown by developers due to the site’s relatively untested location as being responsible. “A high-rise condo will be first of its kind in this area, and not many developers would be interested in such an undertaking; however, with its knowledge of demographics and housing requirements in this location, they could replicate its success at Lentor estate.”

Upper Thomson Road (Parcel B) closed for tender the same day as Zion Road’s GLS site and City Developments Ltd (CDL) submitted the sole bid of $1.107 billion ($1,202 psf ppr) for City’s 164,451sqft site – making this first GLS site to test out long-stay serviced apartments scheme introduced by government last November.

GuocoLand-Hong Leong Joint Venture may gain a first mover advantage by purchasing Parcel B of Upper Thomson Road and becoming the first landowner within Springleaf Precinct, providing them with the chance to shape its development while potentially altering market dynamics for subsequent land sales in this precinct.

Last non-landed GLS site awarded in the region was on Chuong Kuo Road and awarded to a consortium of local boutique developers in 2018. Since then, Lian Soon Holdings, OKP Land, and HSB Developments have developed this site into the 84-unit The Essence condo project.

Given a dearth of new condo launches in this locale, the project at Upper Thomson Road (Parcel B) could take advantage of unfulfilled demand by capitalising on pent-up demand for such properties in this location.

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