The Urban Redevelopment Authority has accepted low bids submitted by joint ventures backed by billionaire Kwek Leng Beng’s City Developments Ltd. (CDL) and his cousin Quek Leng Chan’s GuocoLand for two prime residential sites in Singapore amid softening housing demand in the city-state. The bids were reportedly the only ones submitted for each parcel, following the implementation of government cooling measures and high construction costs.
CDL and Mitsui Fudosan plan to build 740 housing units across two residential blocks and a tower with serviced apartment rental units on a 15,278 square meter site on Zion Road near the Orchard Road shopping district. The consortium’s bid was 30% lower than a nearby land parcel sold in 2017, reflecting changing market conditions. Despite slowing property sales, the project is expected to attract local buyers due to its prime location.
GuocoLand and Hong Leong Holdings also submitted a winning bid of S$780 million for a residential site in Upper Thomson Road, where about 940 residential units can be built on a 32,024 square meter plot. While the unit pricing was slightly below expectations, it was reflective of the plot’s large size and the competitive landscape. The site was awarded in recognition of market conditions and the potential for development in the area.
The government’s decision to accept the bids may have taken into account the risks associated with the large ticket size of the sites, high construction costs, elevated borrowing costs, and cooling measures. Despite these challenges, the projects are expected to be compelling for Singaporean homebuyers and permanent residents, offering an attractive price range in a prime location near Orchard Road and the Downtown Core.
Overall, the acceptance of the low bids highlights the changing dynamics of the property market in Singapore, with developers adjusting their strategies in response to government policies and market conditions. While challenges remain, the developments on Zion Road and Upper Thomson Road are expected to contribute positively to the residential market and attract local buyers looking for quality homes in prime locations.
In conclusion, the successful bids by CDL and GuocoLand underscore their confidence in the long-term potential of the Singapore property market despite current challenges. The projects on Zion Road and Upper Thomson Road are expected to be well-received by local buyers, offering a mix of residential units and serviced apartments in desirable locations. As the developers move forward with their plans, they will have the opportunity to contribute to the ongoing growth and development of the city-state’s real estate sector.
