CapitaLand & UOL place highest bid at S$805m on Holland Site

The highest bid comes out at S$1,285/sqft/ppr. This is lower than market expectations and reflects the risk aversion that developers continue to show for prime, large residential sites.

In a tender held by the Singapore government on Tuesday (May 14, 2015), three bids for a large, 99-year-leasehold private housing plot in Singapore near Holland Village Station MRT were submitted. The three bids received were lower than market expectations due to the continued caution of developers in regard to large prime sites.

The winning bid came from a group led by UOL Group, and CapitaLand Development. It was S$805.39million, or S$1,285per square foot, per plot ratio.

The Business Times surveyed analysts on Monday and they had generally predicted that the top bid would be between S$1,350psfppr and S$1,500psfppr. The site has the potential to yield 680 houses. The Business Times polled analysts who predicted that the site would receive between one and five offers.

Hong Realty and Intrepid (a division of Hong Leong Holdings), in partnership, made the second-highest offer of S$765,26 Million or S$1,221 PSF ppr. The difference between top two bids of 5 per cent indicates that the developers have placed a market value on this location. It is a compelling reason to consider awarding this site.

Japura Development and CK Asset (founded by Hong Kong tycoon Li Kashing), which is linked to CK Asset’s CK Asset Group, submitted the lowest offer of S$632,000,000, or S$1,008 psf ppr. The Singapore Urban Redevelopment Authority, or URA, conducted the auction.

Market watchers noticed that the S$1,285 top bid per square foot is roughly 32 percent lower than the S$1,888 pesf/ppr for the adjacent residential and commercial property in 2018. Far East Organization, in partnership with a group of developers, is transforming that site into One Holland Village. This project will include residential units, retail spaces, offices, and serviced apartments.

While the mixed-use One Holland Village isn’t comparable to the residential Holland Drive, the developers are clearly more conservative than they were six years ago.

In addition, the high number of units that can generated at the Holland Drive site may have dampened bids.

One Holland Village Residences – which has 296 units, far fewer units than the estimated 680 for the Holland Drive parcel – was sold out within four years. Therefore, it is likely that developers will be cautious in regards to the site at Holland Drive. It is located a little farther away from Holland Village’s MRT station.

While the larger site size, 680 housing units, allows developers to benefit from economies of scope and more units while reducing development risk.

The prime location in this area would have made it more appealing to foreign investors and buyers had the cooling measures of April 2023 not increased the rates for Additional Buyers’ Stamp Duty.

The consortium that bid the highest at the last tender comprises: CapitaLand Development and UOL each with 35 per cent, Singapore Land (20 per cent) and Kheng Leong (10 per cent).

This is the joint venture’s second, following the Tampines Avenue 11 Mixed-Use State Land Sale Site that the duo secured last year.

If the consortium is awarded the contract, they plan to build on site two 40-storey towers housing 680 condominium units. They believe that the site’s location, adjacent to Holland Village and its compelling lifestyle, will make it a desirable option for homebuyers.

The developer had sold the entire 296-unit One Holland Village Residences project, which was launched in November 2019 at an average cost of S$2,804/sqft, by August 20, 2023. The developer sold 63 of the 296 units at an S$2,943 average price per sqft in 2023.

The Holland Drive plot, which will be the site of the future condominium project, has the potential for an average selling price that starts at $2.800 psf.

Breakeven costs are estimated between S$2,500psf and S$2,700psf depending on design, technical and material considerations. Launch prices will likely start at S$2,800/psf with an estimated average price of S$2,900/psf.

The Holland Drive parcel is the final plot for private development in Holland Village. It is next to One Holland Village mixed use development and a few minutes walk from Holland Village station.

The Holland Drive property, which is 133,343 feet square (sq ft), and has frontages to Holland Drive and North Buonavista Road as well as Holland Road, allows for a maximum gross area of 626.717 sq.ft.

Close to the site are public housing estates, private condominiums, and Good Class Bungalows located along North Buona Vista Road. The site also has established schools nearby, such as Nanyang Primary Primary, Henry Park Primary Primary and Fairfield Methodist Primary.

Holland Village offers a variety of amenities that will benefit the future project. These include retail stores, food and beverage outlets and other services.

As a summary of the bids received for the Holland Drive Site, developers once again saw a conservative approach to bidding.

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