URA releases reserve list site in Zion Road after developer commits to bid at least $604.6 million
The Urban Redevelopment Authority (URA) has put up a site in Zion Road for sale from its reserve list after receiving an application committing to a bid not less than approximately $604.6 million. This move follows the recent sale of a larger neighboring site in Zion Road to a City Developments Limited-Mitsui Fudosan joint venture (CDL-Mitsui) for $1.1 billion, or $1,202 per square foot per plot ratio (psf ppr). Despite CDL-Mitsui’s bid being below expectations and 30% lower than a comparable state land site across the road, it has triggered interest in the area.
Zion Road (Parcel B) emerges from the reserve list in the Government Land Sales (GLS) program for the first half of 2024. Reserve list sites are released for sale if a developer offers a minimum price acceptable to the government and if there is sufficient market interest. The site can yield approximately 610 new private homes and was triggered for sale after a developer committed to submitting a bid at the minimum price of $604,567,890.
This minimum price translates to a land rate of about $1,080 psf ppr, which is 10% lower than Parcel A’s price. Despite recent weak developer appetite, the minimum land rate is deemed attractive. Parcel B, being smaller and without the requirement to build a new category of serviced apartments, presents lower development risk and should command a higher land rate.
CBRE expects three to four bids for the plot, with a top bid price ranging from $1,300 to $1,380 psf ppr, or approximately $730 million to $770 million. The land parcel in Zion Road has a site area of 9,285.9 sq m and a maximum gross floor area of 52,002 sq m. The tender closes in July 2024 amidst the Government’s plan to make 5,450 residential units available via the confirmed list of the first-half 2024 GLS program, marking the largest supply of confirmed list units since the second-half 2013 GLS program.
