A UOL Group joint venture has submitted the S$428.3 million ($319.3 million) top bid for a residential site in Singapore’s Orchard area, with the price per square foot of the future luxury project falling nearly a third short of the rate set in a 2018 tender for a Cuscaden Road parcel which marked the most recent previous sale in the upscale neighbourhood.
With developers traditionally marketing projects on Orchard Road and in other prime areas to foreigners, market analysts see the cut-rate offer for the parcel on Orchard Boulevard as reflecting the impact on developer confidence of market cooling measures put in place by the government as well as broader price inflation.
“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,” said Tricia Song, head of research for Singapore and Southeast Asia at CBRE.
Other analysts had estimated that the 75,686 square foot (7,031 square metre) site would sell for at least S$1,800 per square foot of built area, with the vehicle invested by UOL and its SingLand subsidiary besting three other offers according to results of the Urban Redevelopment Authority (URA) tender released on Thursday.
Land Price Slides By a Third
Should the UOL joint venture be awarded the tender, it would be set to develop the 99-year leasehold Orchard Boulevard plot into as much as 264,910 square feet of gross floor area, with 5,380 square feet of ground floor space allotted for commercial use.
The top bid represents a 32 percent discount to the S$2,377 per square foot which a consortium of Singapore’s SC Global and its Hong Kong-based partners, New World Development and Far East Consortium paid in their S$410 million purchase of the Cuscaden Road plot in 2018.
That parcel is now home to the 192-unit Cuscaden Reserve luxury condo project, which was completed in August of last year, with 12 units in the development having sold at an average price of S$3,609 per square foot since its launch in September 2019, according to PropNex Realty.
The Orchard Boulevard site is located near the intersection of Grange Road and Orchard Boulevard, close to a cluster of embassies and some of the most exclusive residential neighbourhoods in the city-state such as the Chatsworth Park good-class bungalow area.
Knight Frank expects units in the upcoming Orchard Boulevard project to sell for S$2,800 to S$3,000 per square foot, while JLL sees selling prices surpassing S$3,200 per square foot.
Ramping Up Land Bank
In a statement, UOL group chief executive officer Liam Wee Sin said the company plans to develop a luxury residential tower of 36 floors or more on the plot, which could yield 280 new homes atop a single floor of retail space linked directly to the Orchard Boulevard MRT station.
“This is the first residential land parcel released in Orchard/Tanglin area since 2018. The site has very attractive locational attributes. This Orchard Rd site is also a timely addition to our luxury collection in sought-after locations such as Nassim, Meyer and Watten,” Liam said.
The addition to UOL’s pipeline comes six months after it teamed up with CapitaLand Development in a URA tender to secure the Tampines Avenue 11 commercial and residential plot in northeastern Singapore for S$1.2 billion.
The developer’s confidence may have received a boost from recent sales at its 180-unit Watten House project on Bukit Timah’s posh Shelford Road, where it sold 153 units at a median price of S$3,199 per square foot during the project’s first two months of sales in November and December.
In January 2023 the group completed sales of all 56 units in Meyer House, a luxury condo project on Singapore’s East Coast which it jointly developed with Kheng Leong Co, a private firm owned by the family of UOL chairman and controlling shareholder Wee Cho Yaw.