Mixed reception seen in three land sales on Zion Road, Upper Thomson Road

URA officially pilots long-stay serviced apartments.

Analysts are expecting strong interest in Urban Redevelopment Authority’s (URA) tender for a private residential plot on Zion Road near the city centre, while developers are likely to be more cautious in bidding for the two adjoining sites along Upper Thomson Road.

URA on Monday opened the tender for the 15,277-square metre Zion Road (Parcel A) plot that could yield 1,170 private homes, including 435 units of long-stay serviced apartments, and 2,400 square metres of commercial space. 

It also launched the auctions for the Upper Thomson Road Parcel A and B sites which can yield 640 homes, including 100 long-stay serviced apartment units, and 940 homes, respectively.
With its proximity to Orchard Road and the F&B offerings along the Singapore River, Zion Road (Parcel A) is likely to garner two to three offers with the top bid hovering at $1.47b to $1.66b, or as much as $1,800 per square foot of built area, according to PropNex Realty.

“It is very likely that we will see developers partnering up, potentially with a party that has hospitality experience, to bid for the site,” said Wong Siew Ying, head of research and content at the property agency.

Along Upper Thomson Road in the Springleaf precinct, PropNex expects developers to maintain cautious bidding for the two sites due to the huge supply of new homes in the Lentor Hills area. 

PropNex projected Parcel A to have four to five bids with the winning offer likely reaching as much as $723m, while around two to three bids will likely be submitted for Parcel B for up to $948m.

Huttons Asia, in a separate commentary, cautioned that the risks developers have to consider in bidding for Parcel A since the area is still “an untested site for serviced apartments.”

Huttons said the winning bid for each of the two sites may not reach beyond $1,000 per square foot per plot ratio, and only up to three developers are likely to participate.

Justin Quek, deputy chief executive officer of OrangeTee & Tie, said they are also expecting fewer bidders for this batch of land sales as three large plots were released at the same time.

“Elevated interest rates, macroeconomic uncertainty, geopolitical developments and high construction costs will also continue to weigh on developers,” he said.

The tenders for Zion Road (Parcel A) and Upper Thomson Road (Parcel B) will close on 4 April, while the auction for Upper Thomson Road (Parcel A) will last until 19 June.