Photo from URA SPACE

3 takeaways from the rapid trigger of Zion Road B tender 

Experts expect 2-4 bids and a top bid price of $1,150-$1,380 psf ppr.

Shortly after the awarding of Zion Road (Parcel A), the Urban Redevelopment Authority surprised real estate experts by announcing the launch of Zion Road (Parcel B) for public tender sale.

"We did not expect the Zion Road (Parcel B) site to be triggered so soon," PropNex commented. 

Huttons noted three reflections stemming from the release of Parcel B for sale from the Reserve List: firstly, developers show a stronger inclination towards bidding for pure residential sites over those incorporating a long-stay serviced apartment (SA2) element.

"Selling residential homes is more straightforward and carries lesser risks compared to undertaking a newer venture," Huttons said. "Without the SA2 component and at about 60% of the GFA of Parcel A, Parcel B poses lower development risk and should warrant a higher land rate," CBRE commented. 

Another takeaway from the triggering of the site from the Reserve List is that developers are seeing the potential of plum sites at Zion Road. 

"If awarded, the two sites at Zion Road can yield up to 1,345 residential homes. There will be another parcel of land at River Valley Green (Parcel A), which can be built into a 380-unit project. Despite the potential competition, developers hold the view that there is sufficient demand for homes in this area," Huttons said. 

CBRE expects CDL-Mitsui JV to be interested in defending the area and more developers to be interested in the plum site.

Lastly, Huttons believe the triggering of a site for sale "may signal a gradual return of confidence by developers in the property market." 

PropNex echoed this, saying: This could reflect developers’ confidence in the home buying demand in that area, given the site’s attractive location near two MRT stations (Havelock and Great World), and amenities such as the Great World City mall." 

"In addition, the developer could also be seizing the opportunity to apply for the plot at a more measured price amidst the cautious market sentiment," PropNex added. 

Propnex expects two to three bids for the Zion Road (Parcel B) site and a top bid price of around $1,150 to $1,250 psf ppr ($644m to $700m). 

CBRE expects a higher range of three to four bids and a top bid price of $1,300-$1,380 psf ppr or about $730m-$770m.

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