Site near Great World City draws two bids; top bid of S$1,325 psf ppr from Wing Tai

Outcome is within market expectation but reflects continuing developer caution amid heightened business risks

Jun 20, 2024


River Valley Green (Parcel A), on the confirmed list of the first-half 2024 Government Land Sales programme, can yield about 380 private housing units. GRAPHIC: HANNAH KWAH, BT, FROM URA, ONEMAP

THE latest state land tender shows developers continuing to display reduced appetite for private residential sites amid the strain from persistently high interest rates and property cooling measures, among other business risks.

A plum 99-year leasehold private housing site near Great World City managed to draw two bids. However, there was not even a single bid for a plot in Upper Thomson Road that includes a mandatory long-stay serviced apartment component.

Both sites have 99-year leasehold tenure and are next to MRT stations on the Thomson-East Coast Line.

A Wing Tai Holdings unit placed a bid of nearly S$464 million or about S$1,325 per square foot per plot ratio (psf ppr) for the plot next to Great World MRT station. The other bid, from Hong Realty, which is part of Hong Leong Group, was nearly S$444.89 million or S$1,271 psf ppr.

The site, named River Valley Green (Parcel A), has a land area of 100,032 sq ft and can generate about 380 private homes.

“The low level of interest in the tender for this plot shows that developers remain cautious even though they are still inclined towards smaller plots,” said JLL’s head of residential research for Singapore, Chia Siew Chuin.

Wing Tai’s bid was 12.5 per cent below the S$1,515 psf ppr that City Developments paid in January 2020 for the nearby Irwell Bank Road site, now being developed into Irwell Hill Residences. That site is also for pure residential use.

Analysts point to a general slowdown in new private home sales as well as supply concerns in the locale being at play at Wednesday’s (Jun 19) tender closing.

Questions on depth of housing demand

“Private home buyers have become increasingly selective this year as reflected in the patchy performance at new launches. With price resistance setting in, buyers are more careful about the product they choose,” noted Knight Frank Singapore’s research head Leonard Tay.

PropNex’s head of research and content, Wong Siew Ying, said she expects developers to remain cautious as there could be “some uncertainty about the depth of private housing demand” after slower sales in 2023 and relatively lacklustre transaction volume in recent months amid limited project launches.

“The pipeline of yet-to-be-launched projects and the ample supply of units from the first-half 2024 GLS (Government Land Sales) programme are also factors that will be on developers’ minds.”

Attractive location, but competing supply

Observers said that notwithstanding the attractive location of River Valley Green (Parcel A) – beside an MRT station and near the Great World City mall and River Valley Primary School – the new project will face competition from oncoming new supply.

Wong pointed to about 1,780 housing units that will be generated from Zion Road Parcels A and B (including some 435 long-stay serviced apartments on Parcel A, which was awarded in April.) Parcel B, a pure residential site next door, was triggered for release from the reserve list of the GLS programme, and its tender will close on Jul 18.

Observers also point to further potential supply if River Valley Green Parcel B, which is on the reserve list, is triggered for release. The plot can generate 580 residential units inclusive of about 220 long-stay serviced apartments. (Long-stay serviced apartments, with a minimum stay duration of three months, are a new rental concept unveiled by the government in November last year.)

Justin Quek, the chief executive of OrangeTee & Tie, said: “There may be more eyes on the upcoming H2 2024 GLS programme for other alternative sites.”



CBRE’s head of research for Singapore and South-east Asia, Tricia Song, said developers were probably cautious about River Valley Green (Parcel A) due to its prime location in the Core Central Region. “The new project on the site will likely have a high price point and an investor or foreigner focus – market segments which have been hit hard by hikes in the additional buyer’s stamp duty rates in April last year,” she added. Song said the development has the potential to achieve an average selling price of S$3,000 psf.

Another reason that could have kept developers away from the plot could be “more complex construction considerations given the irregular shape of the site and that it almost sits on top of Great World MRT station”, said Knight Frank’s Tay.

Property consultants polled by The Business Times had expected the plot to receive one to four bids, with the highest bid coming in at S$1,200-1,400 psf ppr.

Observers noted that both bids received for the plot are higher than the S$1,202 psf ppr fetched for Zion Road (Parcel A) in April. However, that plot is zoned residential with commercial use at first storey; and the residential use includes a mandatory long-stay serviced residence component.

https://www.businesstimes.com.sg/pro...f-ppr-wing-tai