Singapore

CBRE commentary for closing of URA sale site at Orchard Boulevard and EC site at Plantation Close (2)

February 1, 2024

Associated Contact

Melvin Lin

Head of Marketing & Communications, Singapore

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By Tricia Song (宋明蔚), Head of Research, Southeast Asia, CBRE

The URA site at Orchard Boulevard (280 units) and HDB Executive Condominium (EC) site at Plantation Close (560 units), continued to reflect the cautious sentiment seen in last month’s land tenders.  

As the first CCR land tender to close since the increase in ABSD under Apr 2023’s round of cooling measures, the residential with commercial at 1st storey site at Orchard Boulevard saw reasonable interest, receiving a decent four bids but a top bid price of $1,617 psf ppr, below our expectations. 

Meanwhile, the EC site at Plantation Close drew 4 bids, at the lower end of usual 4-9 bids, with a top bid price of $701 psf ppr, within our expectations. 

This shows continued risk aversion among developers in light of the high interest rate environment, macroeconomic headwinds and the cooling measures, as new developer sales slumped to a 15-year low of 6,421 units in 2023.

Orchard Boulevard
The residential with commercial at 1st storey site at Orchard Boulevard site received a decent 4 bids with a top bid of $428.28 mil ($1,617 psf ppr) submitted by a joint venture between UOL Group and Singapore Land.   

The plot is the first to be released under the Government Land Sales (GLS) programme in the Orchard area since May 2018 when the Cuscaden Road site drew 9 bids and awarded for $410 mil or $2,377 psf ppr, and eventually redeveloped into Cuscaden Reserve. Orchard Boulevard’s top bid unit price of $1,617 psf ppr is a significant 32% below the Cuscaden Road site but is likely to be awarded due to the healthy number of bids received and consensus for the site, with all 4 bids bundled within a 9% range from the top bid ($1,487 – 1,617 psf ppr). 

While the $1,617 bid price is below our expectations, it is indicative of developer caution for prime sites since the increase in ABSD under Apr 2023’s round of cooling measures and when compared against the Cuscaden Road site, the more conservative bid prices could also reflect the factoring in of higher construction costs amid the current inflationary environment.

Cuscaden Reserve, completed in 2023, has sold 12 units or 6% of total 192 units since its launch in Sep 2019. The last transacted price was $3.50 mil or $3,777 psf for a high floor unit in Dec 2023.    

Offering the flexibility of building a portion or full serviced apartments, we expect the developer could launch at an average selling price of $3,200 – 3,500 psf.

Tender results for Orchard Boulevard (from confirmed list H2 2023)
Award date: TBC
Launch date: 17-Oct-23
Close date: 1-Feb-24
Land use zoning: Residential with Commercial at 1st Storey
Site Area: 7,032 sqm / 75,687 sf
Gross Plot Ratio: 3.5
Permissible Gross Floor Area: 24,611 sqm / 264,913 sf
No. of units: 280
Lease Period: 99y

   
   
Name of Tenderer Parent company Tender Price  $psf/GFA  % from top bid
 1  United Venture Development (No.7) Pte. Ltd. UOL Group/Singapore Land  $428,280,980  $1,617    
   
 2  Valerian Residential Pte. Ltd. Allgreen Properties  $418,000,888  $1,578 2.46%
 3  Winchamp Investment Pte. Ltd. Wing Tai Holdings  $408,333,888  $1,541 4.88%
 4  SL Capital (8) Pte Ltd Sustained Land  $393,900,000  $1,487 8.73%

Orchard Boulevard

Plantation Close (2) EC
The EC plot at Plantation Close drew 4 bids, below our expectations with a top bid of $423.38 mil or $701 psf ppr from a JV between Hoi Hup Realty and Sunway Developments. This site is adjacent to a prior Plantation Close parcel which was also awarded to Hoi Hup and Sunway JV in Sep 2023 for $348.50 mil or $703psf ppr, among 9 bids. As Hoi Hup Realty and Sunway Developments emerged the top bidder for both Plantation Close sites, the joint venture is likely to capitalise on economies of scale by amalgamating the sites to form a single mega project of over 1,000 units.  

Interest in today’s tender was more subdued likely due to competition from nearby Bukit Batok West Avenue projects, Altura and Lumina Grand. The latter of which was launched over the 27-28 Jan 2024 weekend and saw lukewarm interest, moving 53% of its 512 units at an average price of $1,464 psf.

However, the firm pricing continues to reflect developers’ confidence in the EC market as the segment is generally not as affected by the recent property cooling measures due to the higher proportion of owner-occupiers and first-time buyers. There is also a limited supply of new EC units in the market, and developers are seeking a less risky development site to add to their inventory.

At the top bid price of $701 psf ppr, we expect the developer could launch at an average selling price of $1,400 – 1,500 psf.

Tender results for Plantation Close (2) EC (from confirmed list H2 2023)
Award date: TBC
Launch date: 30-Nov-23
Close date: 1-Feb-24
Land use zoning: Residential
Site Area: 20,038 sqm / 215,691 sf
Gross Plot Ratio: 2.8
Permissible Gross Floor Area: 56,107 sqm / 603,936 sf
No. of units: 560
Lease Period: 99y

   
   
Name of Tenderer Parent company Tender Price  $psf/GFA  % from top bid
 1  Hoi Hup Realty Pte Ltd and Sunway Developments Pte. Ltd. Hoi Hup Realty/Sunway Developments  $423,380,000  $701    
   
 2  Forsea Residence Pte. Ltd. and CNQC Realty (Pioneer) Pte. Ltd. China Communications Construction Co./Qingjian Group  $416,888,888  $690 1.56%
 3  Intrepid Investments Pte. Ltd. and TID Residential Pte. Ltd. Hong Leong Holdings/Mitsui Fudosan Co.  $398,597,597  $660 6.22%
 4  CDL Polaris Properties Pte. Ltd. CDL  $383,800,000  $635 10.31%

Plantation Close

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.