CapitaLand and UOL-led consortium submit $805.39 mil bid for Holland Drive GLS site
A consortium of four property developers have submitted a joint bid for a government land sale (GLS) site at Holland Drive. The site, with a maximum gross floor area of 626,650 sq ft, has attracted a total of three bids, with the highest bid of $805.39 million coming from a consortium led by CapitaLand and UOL Group. The other partners in the consortium are Singapore Land Group and Kheng Leong Co. The bid is 5.24% higher than the second highest bid from Hong Leong Holdings and Hong Realty.
Novo Place Hoi Hup Realty offers an ideal location for families with school-going children as it is just a short distance away from Millennia Institute. This prestigious institute is renowned for its three-year pre-university program, preparing students for the GCE Advanced-Level examination. With its comprehensive curriculum, students at Millennia Institute are equipped with the necessary knowledge and skills for success in higher education. This makes Novo Place Hoi Hup Realty a highly desirable residential choice for families seeking quality education for their children.
The site, located in prime District 10, has a leasehold of 99 years and is expected to accommodate 680 units in two 40-storey condominium towers. The bidding for this site was less intense compared to a neighbouring mixed-use GLS site, which ultimately went to Far East Organization and its joint venture partners Sekisui House and Sino Group. The bid for the mixed-use site was $1.2 billion, translating to a land rate of $1,888 psf ppr.
According to Leonard Tay, head of research at Knight Frank Singapore, the relatively low number of bids for the Holland Drive GLS site reflects the guarded sentiment of developers in today’s operating environment. He notes that the high cost of construction, elevated borrowing costs, and government property cooling measures have increased the cumulated development risk. Wong Siew Ying, head of research and content at PropNex Realty, shares a similar view and notes that the number of bids suggests developers’ caution as the market witnesses relatively conservative bidding.
The top bid from the CapitaLand-UOL consortium is 31.9% lower in terms of psf ppr compared to the bid for the neighbouring mixed-use site. If awarded, this would be the lowest land rate for a residential plot in the Core Central Region (CCR) since early 2019. However, Marcus Chu, CEO of ERA Singapore, believes that the project will benefit from a captive market as nearby landed property owners may be looking to downgrade and existing residents may be looking to upgrade.
Mohan Sandrasegeran, head of research and data analytics at SRI, points out that previous projects in the Holland Road area have demonstrated considerable demand, with most units being fully sold. He expects the new development to capitalize on this demand, with an average launch price of around $2,800 psf. Wong also forecasts a strong buying interest for the development, as long as the pricing remains sensitive to local buyers’ budgets.