CapitaLand and UOL consortium places highest bid of S$805,39 million on Holland Drive site
Three bids were received for a 99-year leasehold site of private housing in Singapore, near the Holland Village MRT Station. The tender was held by the state on Tuesday (May 14, 2014). They were however below the market expectations, as developers are still cautious of large prime sites.
The highest bidder, a consortium led UOL Group and CapitaLand Development was S$805.39million, or approximately S$1,285 a square foot per plot rate (psfppr).
The top bid was lower than what The Business Times polled analysts to predict on Monday. The site can produce 680 private houses. They predicted that one to five bids would be made for the site.
Justification for award
The second highest bid of S$765.26m or S$1,221 per square foot ppr came from a joint venture between Intrepid Investments, a unit of Hong Leong Holdings, and Hong Realty. The difference in the two top bids was 5 percent, indicating that developers valued this site at this market value. This may be a good reason to award the site.
Japura Development was the lowest bidder, with a S$632,000,000 or approximately S$1,008 psf ppr. It was linked to CK Asset which was founded by Hong Kong tycoon Li Kashing. The Singapore Urban Redevelopment Authority conducted the tender.
The top bid of S$1,285 per square foot per person is approximately 32 percent below the S$1,888 per square foot ppr that was achieved in 2018 for an adjacent commercial and residential property. The site is being developed by a consortium led Far East Organization into One Holland Village, a residential, retail, office, and serviced apartment project.
Although a pure residential Holland Drive parcel is not comparable to the mixed-use One Holland Village, developers have clearly submitted more conservative bids than six years ago.
The large number of housing units for private use that could be created on the Holland Drive property may have also dampened bids.
The developers were likely to be cautious when it comes to the site on Holland Drive. It’s a little further from the Holland Village station.
Although developers can take advantage of the site’s size, which includes 680 housing units, to benefit from economies of scale, its greater size also comes at higher development risks.
The site is located outside of the Henry Park Primary School’s 1km radius, which may make it less appealing to young families and locals. Its prime location, however, would have been more attractive to foreign investors and buyers, if not for the increased rates in the Additional Buyers Stamp Duty (ABSD), for these buyer profiles, under the April 20,23 cooling measures.
The consortium that won the most recent tender has a stake of 35 percent each in CapitaLand Development, UOL and Singapore Land and 10 percent in Kheng Leong.
The joint venture is the second between CapitaLand, and UOL after Parktown Residence at Tampines Avenue 11, a mixed-use land sale site, which the two clinched last. This project will be launching in Q1 2025. Parktown Residence showflat will locate at Tampines Grande.
According to a spokesperson from the consortium, if the tender is awarded, the group plans to build two 40-storey condo towers on the site. The towers will accommodate 680 units. The consortium believes that this site will attract discerning homebuyers due to its location next to Holland Village. This iconic community offers a compelling lifestyle and is popular among both locals and expatriates.
Developers sold all 296 units of the One Holland Village Residences in August 2023 at an average price S$2,804 per square foot. The developer sold the last 63 units in 2023, at an average of S$2,943 per square foot.
Sell-price projections
The future condo development on the Holland Drive parcel has the potential for an average selling price as low as $2.800 per square foot.
The breakeven costs at between S$2,500 psf to S$2,700 psf depending on design, technical and material considerations. He said that launch prices will likely start at S$2,800 per square foot, with an average price of S$2,900 per square foot.
The price of the unit could begin at S$2,800 psf.
The average selling price could come in above S$2,700 per sq. ft.
The Holland Drive plot is the last land available for private residential development within the popular Holland Village Enclave. He said that the adjacent parcel would be developed as a Build to Order HDB project by June 2024. The parcel is located next to One Holland Village, a mixed-use development. It’s also a short distance from Holland Village MRT Station.
The Holland Drive site can be developed up to a maximum floor area of 626.717 square feet. It measures 133.343 sq ft and has frontages along Holland Drive, NorthBuona Vista Road, and Holland Road.
The site is also near established schools such as Nanyang Primary, Henry Park Primary and Fairfield Methodist (Primary). It is near schools like Nanyang Primary School, Henry Park Primary School and Fairfield Methodist Primary.
Holland Village will provide the future project with many amenities, including retail and food and beverage options.
The bids at the Tuesday tender for the Holland Drive location, Despite the attractive location, developers remain circumspect as we have once again seen relatively conservative bidding.
