GuocoLand hold on Upp Thomson can be cemented by site’s win

The Upper Thomson area’s latest state-sponsored tender concluded with developers avoiding the land market due to the general caution in the marketplace.

The site only attracted one bidder, a joint venture of GuocoLand with Hong Leong Holdings. Their offer was around S$780M or S$904.60/square foot per plot rate (psf/ppr).

The Business Times polled The Business Times just before the bid deadline on Thursday (4 April) and found that only one offer was received. Consultants predicted that three to five bids would be received, with the top bid between S$1,000 psf and S$1,100 for ppr.

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The land rate for Lentor Central is also 8% lower. The site was awarded by Hong Leong Holdings to a Joint Venture between GuocoLand & China Construction Development Co in September 2023 for S$435.2M or S$982psfppr.

Although site-specific restrictions may have discouraged some players, an expert in property says that winning Upper Thomson would give you a leg up in a developing area that’s primarily a landed residential precinct.

The consortium is most likely motivated by its defensive strategy of maintaining a strong foothold outside the Lentor neighborhood. It allows them to better manage their sales and pricing. GuocoLand, in addition to the subject site, is also developing 2,211 apartments in Lentor.

Researchers noted that there are currently around 1,200 unsold units in different projects in the Lentor Hills estate where six plots were sold and five projects had been launched.

The second site, located on Upper Thomson Road, is a state-owned land adjacent to the first. This plot, which is currently for sale, could yield 640 apartments, including 100 long stay serviced apartment.

Analysts estimate that Upper Thomson (Parcel B), based on the S$905 bid psf for the site will launch between S$2,000-S$2,200 per sq ft.

Analysts mentioned that if launch price was palatable, the project could be attractive for local homebuyers seeking to downgrade their landed housing from Springleaf and Yio Chu Kang estates, as HDB upgraders.

The Upper Thomson Road (Parcel B), plot measures 32,023.7 square meters (sq m) and will yield 940 homes.

The Essence, a 99 year leasehold condominium on Chong Kuo Road in the vicinity was launched in march 2019. The Essence has had new sales that have averaged S$1,376/sqft since its launch. The development is built on land that was purchased in 2018 for S$43.95m, or S$681psf ppr.

The latest transaction, which was a sub-sale for an 818 square foot unit in January cost S$1.3m or S$1,638/sqft.

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