Consortium Led by UOL and CapitaLand Places Top Bid of S$805.39 Million for Holland Drive Site
A prime 99-year leasehold private housing site near Singapore’s Holland Village MRT station attracted three bids at a state tender on Tuesday (May 14). Despite its desirable location, the bids were below market expectations, reflecting developers’ cautious approach towards large, premium sites.
The highest bid came from a consortium led by UOL Group and CapitaLand Development, offering S$805.39 million, or about S$1,285 per square foot per plot ratio (psf ppr). This bid fell short of the S$1,350 to S$1,500 psf ppr range predicted by analysts surveyed by The Business Times. The site is projected to yield approximately 680 private homes, and experts had anticipated between one to five bids.
Bid Justification and Market Context
The second-highest bid of S$765.26 million (S$1,221 psf ppr) was submitted by a partnership between Intrepid Investments (a unit of Hong Leong Holdings) and Hong Realty. Ngiam Juyong, project director at Huttons Asia, commented on the narrow 5% difference between the top two bids, suggesting this close margin could justify awarding the site based on perceived market value.
Japura Development, linked to CK Asset founded by Hong Kong tycoon Li Ka-shing, offered the lowest bid of S$632 million (S$1,008 psf ppr). The tender was managed by Singapore’s Urban Redevelopment Authority (URA).
Market analysts noted that the top bid of S$1,285 psf ppr is about 32% lower than the S$1,888 psf ppr achieved in 2018 for a neighboring commercial and residential site. This site, being developed by a consortium led by Far East Organization into the One Holland Village project, includes residential, serviced apartment, retail, and office components.
Leonard Tay, head of research at Knight Frank Singapore, pointed out that while the Holland Drive site is strictly residential, the cautious bids reflect a more conservative approach from developers compared to six years ago. The prospect of 680 units might have also dampened enthusiasm.
Wong Siew Ying, head of research and content at PropNex Realty, highlighted the slower sales pace for One Holland Village Residences, which took about four years to sell out its 296 units. This could have made developers wary of the larger Holland Drive project, which is slightly farther from the MRT station.
Development and Market Projections
Tricia Song, head of research for Singapore and Southeast Asia at CBRE, noted that while the Holland Drive site’s size allows for economies of scale, it also carries higher developmental risks. The site’s distance from popular Henry Park Primary might lessen its appeal to local families, especially after the April 2023 increase in Additional Buyer’s Stamp Duty (ABSD) for foreign buyers and investors.
The consortium’s bid distribution includes 35% each for CapitaLand Development and UOL, 20% for Singapore Land, and 10% for Kheng Leong. Marcus Chu, CEO of ERA Singapore, remarked that this is their second joint venture following a previous successful bid for a mixed-use site at Tampines Avenue 11.
A consortium spokesperson stated plans to develop two 40-storey condominium towers with 680 units, emphasizing the site’s appeal due to its proximity to Holland Village, a favorite among locals and expatriates.
Price Estimates and Future Prospects
The 296-unit One Holland Village Residences, launched in November 2019, was fully sold by August 2023 at an average price of S$2,804 psf. The last 63 units were sold in 2023 at an average of S$2,943 psf.
CBRE’s Song projected that the future condo project on the Holland Drive plot could achieve an average selling price starting from S$2,800 psf. Knight Frank’s Tay estimated the breakeven cost between S$2,500 and S$2,700 psf, with launch prices likely beginning at S$2,800 psf and possibly averaging around S$2,900 psf. PropNex’s Wong and ERA’s Chu also estimated starting prices above S$2,700 psf.
Huttons’ Ngiam noted that the Holland Drive site is the last plot available for private residential development in the Holland Village area. The neighboring parcel will be launched as a Build-To-Order HDB project in June 2024. The site is strategically located near public housing, private condominiums, and prestigious schools like Nanyang Primary, Henry Park Primary, and Fairfield Methodist (Primary).
Summarizing the tender outcomes, Wong from PropNex remarked that developers remained cautious, as evidenced by the relatively conservative bids, despite the site’s appealing location.
