CapitaLand and UOL pay highest bid of S$805m on Holland Dr.

The highest bid was S$1,285 for a prime residential site, which is below market expectations. This reflects the continued risk aversion of developers in large and prime sites.

At a state auction held on Tuesday, May 14, three bids were submitted for a prime 99-year leasehold housing site in Singapore close to Holland Village station. The bids were, however, below expectations because developers are continuing to be cautious with large, prime sites.

The winning bid was S$805,39,000,000, which is approximately S$1,285 for each square foot and plot ratio.

The Business Times polled on Monday analysts who had predicted a range of S$1,350 per sq ft per person to S$1,500 for the top offer for the site. The site is capable of producing 680 private houses. They predicted between one and five bids.

Hong Realty, in partnership with Intrepid Investments – a unit of Hong Leong Holdings – came up with the second highest bid of S$765.26m or S$1,221psfppr. The difference of 5 percent between the top two offers indicates the value that developers put on the location. It could be a good reason to consider the site.

Japura Development (linked to CK Asset founded by Hong Kong tycoon Li Kashing) submitted the lowest bid of S$632million or S$1,008 psf ppr. The Singapore Urban Redevelopment Authority (URA) conducted the bid.

Market watchers have noted that the top bid for One Holland Village, a residential and commercial site adjacent to the one being developed by Far East Organization, is S$1,285/sf/ppr. This is 32 per cent less than the S$1,888/sf/ppr achieved in 2018. Far East Organization leads a consortium that is transforming the site into One Holland Village. It will be a residential project with serviced apartments and retail space.

The pure residential Holland Drive parcel is not comparable to the mixed-use One Holland Village site, but developers have clearly submitted more conservative bids in comparison with six years earlier. Read up more on new freehold condo beside MRT station: Bagnall Haus

A large number private housing units can be built on the Holland Drive Site, which may have dampened the bids.

One Holland Village Residences – with only 296 apartments – sold out in just four years, compared to the 680 that were estimated for the Holland Drive site. This is why developers are cautious about buying the Holland Drive site, which is a bit further from Holland Village MRT.

Developers can take advantage of the large site of Holland Drive, which has 680 units of housing, to gain economies of size and reduce development risk.

Its prime location, however, would have been more attractive to foreign buyers, investors, and other buyer types, if not for the higher rates of Additional Buyer’s stamp duty (ABSD) for these buyer profiles as a result of the April 2023 cooling measure.

The consortium which placed the highest bid in the latest tender is composed of: CapitaLand Development (35%) and UOL (20%), Singapore Land (10%), Kheng Leong (10%).

The two companies have a second joint venture after securing the mixed-use Tampines Avenue 11 state land sales site last year.

The consortium stated that it would develop two 40 storey condominium towers with 680 apartments on the site if the tender was awarded. The site is a sure bet for homebuyers because of its proximity to Holland Village. Holland Village offers a lifestyle that appeals to both local and foreign buyers.

The developer sold out the 296 units in One Holland Village Residences by August 2023. At an average of S$2,804/sqft. The last 63 apartments were sold at an average cost of S$2,943 each in 2023.

The Holland Drive plot is a future project that could achieve an average sale price as low as $2,800/sq.ft.

According to technical, design and material considerations, the breakeven point is between S$2,500 per sq ft and S$2,700. Prices are likely to start at S$2,800, with a potential average price around S$2,900.

The Holland Drive site represents the last parcel of land available for private residential development within the popular Holland Village Enclave. The adjacent parcel will be launched by HDB as a Build to Order project in June 2020. This site is adjacent to One Holland Village Mixed-Use Development and a short stroll to Holland Village Station.

The Holland Drive Site, measuring 133,343 sq ft, has frontages facing Holland Drive, North-Buonavista Road, and Holland Road. A maximum gross floor area can be achieved of 626.717 sq. ft.

Nearby are existing public housing estates on Holland Drive, as well as Good Class Bungalows and private condominiums along North Buona Vista Road. The site is close to established schools including Nanyang Primary (Primary), Henry Park Primary (Primary) and Fairfield Methodist Primary.

Holland Village, which offers retail and food and drink options, will serve the future development of this site well.

In summarizing the bids, it is clear that despite the attractive location of the Holland Drive, developers were once again faced with a relatively conservative bidding process.

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