Luxury Site in Singapore’s Holland Village Launched Despite Market Slide

A luxury condominium site in Singapore’s Holland Village area which could bring offers as high as S$1 billion ($740 million) has been launched for sale as developers pull back from pricey housing plots in the face of slower home sales and a sliding home prices.

The city-state’s Urban Redevelopment Authority (URA) on Tuesday launched a tender for a site on Holland Drive which could yield 680 new homes, with analysts estimating that the plot could sell for around 15 percent below 2018 prices. The tender for the 133,340 square foot (12,388 square metre) site is due to close 14 May, with local property consultants expecting the project to draw only a third as many bids as a neighbouring plot garnered five years ago.

“Bidding is expected to be prudent and measured – mirroring the cautious tone taken by developers in the GLS (government land sale) tenders of late,” Wong Siew Ying, head of research and content at PropNex Realty said in a statement.

The most recent luxury residential tender to close in Singapore was for a site on Orchard Boulevard, around 3.5 kilometres (2.2 miles) east of the Holland Village site, with a UOL Group venture winning that 1 February tender at a price 32 percent below 2018 levels. Earlier this month the URA rebooted the sale of a high-end project in the Marina South business district after it deemed the sole bid “too low.”

Luxury Sites Lose Their Appeal

The winning bidder for the 99-year leasehold site will earn the right to develop up to 626,700 square feet of gross floor area across a high rise tower up to 164 metres in height which is paired with a low-rise element reaching up to six storeys.

PropNex’s Wong estimates that the plot, which borders Holland Road, North Buona Vista Road and Holland Drive within a few minutes’ walk of Holland Village Park, could bring offers of from S$910 million to S$1 billion, with the high end of that range translating to S$1,600 per square foot of built space.

Despite the plot being the first land to be tendered in the Holland Village area since the URA’s 2018 sale of what is now the One Holland Village mixed-use development, Wong’s projection would price the Holland Drive parcel at 15 percent below the S$1,888 per square foot rate achieved in that earlier transaction.

Analysts stressed that while the Holland Drive parcel is located in one of the most desirable residential areas in Singapore’s urban core, the tender is launching into the face of market headwinds.

“We find this site to be attractive, with its next-door completed One Holland Village shops shaping up as a bustling lifestyle hub,” said CBRE research head for Southeast Asia Tricia Song. “[However], developers are generally still cautious on large investor-focused sites.”

Housing Market Slides

That caution is a result of a sliding housing market with sales of new private homes in Singapore recording their lowest January total in 15 years last month, according to URA statistics.

January’s statistics showed particular weakness in the core central region, where the Holland Drive site is located, with just 25 units changing hands during the month.

Home sales in the Lion City hit a 15-year low in 2023 with homes prices in the core central region dropping 7.3 percent from 2022 levels as new taxes on foreign buyers and investors cooled off high-end housing locations typically favoured by speculators and non-locals.

Despite the 2023 market slide, Singapore’s land sales programme for the first half of this year includes sites set to yield 5,450 new homes, which is up 25 percent from the 4,090 units in the schedule during the first six months of 2023.

With the government focused on housing affordability, the land sale plan for the first half of this represents the city-state’s largest half-year total since 2013, according to the URA.

Note: Beatrice Laforga provided research for this story.