Tender Closing for GLS Sites - Zion Road (Parcel B), De Souza Avenue and Canberra Crescent
31 July 2024
In the three Government Land Sales (GLS) tenders that closed today, the level of interest remained fairly quiet with two bids each at Zion Road Parcel B and De Souza Avenue, and three bids at Canberra Crescent. Perhaps the more palatable ticket sizes of less than S$300 million for De Souza Avenue and Canberra Crescent plots spurred some developers into participating in the tenders. Even in the current challenging development market, developers nonetheless continue to look out for sites that can possibly fall within the ambit of their risk appetites, even with elevated interest rates, cooling measures as well as the high costs of development that include punitive measures such as when deadlines to sell out are not met. With some indication that interest rates could ease before the end of the year, some developers may have decided to go ahead with pre-emptive land banking.
Zion Road Parcel B
The top bid of $1,304 psf ppr at Zion Road Parcel B is slightly above expectations. Given that the nearby plots of Zion Road Parcel A with an estimated 1,170 prospective units and River Valley Green Parcel A with another estimated 380 units have already been awarded and would likely launch around the same time, and in a location that has been traditionally popular with foreign buyers who presently are subject to the 60% Additional Buyer’s Stamp Duty (ABSD), there could be challenges to selling units at Zion Road Parcel B. At a land price of S$1,304 psf ppr, the breakeven cost could possibly range between S$2,500 psf and S$2,800 psf depending on technical, material and design considerations, with launch prices starting from S$2,900 psf. Construction considerations could also be more complex given that it almost sits on top of the underground MRT line between Havelock and Great World MRT Stations. With a possible average price for the project at just above S$3,000 psf when launched, this might be palatable for Singaporean homebuyers and permanent residents, for occupation and for recurring income. There should be leasing demand from foreign professionals who like the neighbourhood, with nearby amenities such as schools and immediate retail facilities such as Great World City, as well as to the nearby premier shopping belt of Orchard Road.
De Souza Avenue
The land rate of the top bid at De Souza Avenue of S$841 psf ppr would likely translate into a possible launch price of just under S$2,000 psf. The De Souza Avenue site is located close to the Bukit Batok Nature Park and Bukit Timah Nature Reserve, attracting the type of buyers that prefer to live close to greenery and recreational options. The likely launch price could be palatable to local homebuyers looking to downgrade from landed housing in the Upper Bukit Timah vicinity, as well as some possible HDB upgraders from the Toh Yi Gardens area, where HDB executive flats have in recent times been sold above S$1 million.
Canberra Crescent
The top bid of S$279 million or S$793 psf ppr is a mere 1.4% higher than the second bid of S$275 million or S$782 psf ppr. If awarded, the launch price could start from S$1,900 psf. With the two projects under development in the vicinity, The Commodore and The Watergardens At Canberra, both already fully sold, and with a pipeline of potential HDB upgraders from HDB units that have recently pass the five-year minimum occupation period (MOP), this site presents itself as an attractive prospect for suburban condominium.
