URA Accepts Lower Than Expected Bids for Zion Road and Upper Thomson Sites
Zion Road (Parcel A) was awarded to a City Developments Limited-Mitsui Fudosan JV at its bid of S$1.1 billion or $1,202 per square foot (psf) of gross floor area. The site is the first to be released for sale in the government’s pilot project for long-stay serviced apartments, a new rental category designed to address a supply crunch that sent housing rents through the roof in the last few years.
The Upper Thomson Road (Parcel B) plot went to a GuocoLand-Hong Leong Group tie-up at its bid of $779.6 million or $905 psf of gross floor area. The parcel is one MRT station away to a new cluster of private housing projects coming up in the Lentor Hills precinct where 5,000 new homes can be erected.
Market watchers had speculated that the Zion Road parcel might not be awarded as the sole bid had come in some 30 per cent lower than the most recent comparable site sold nearby. Prime projects in the central region have taken a hit from higher stamp duties imposed on foreign purchasers and investment buyers since April 2023. Cuscaden Reserve was the latest victim as it had to offer a 20% discount on its balance inventory.
The government has to take a balanced approach in managing state land prices and managing housing supply amidst a more tightly regulated housing market. It can also mitigate the lower land prices through the higher property stamp duties and land betterment charges.
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