News release

Tenders closing for URA sale site at Orchard Boulevard and HDB sale site at Plantation Close

Tender closed for two Government Land Sales (GLS) sites at Orchard Boulevard and Plantation Close (EC).

February 01, 2024

Imran Khan

+65 9389 9004

SINGAPORE, 1 February 2024 – Tender closed today for two Government Land Sales (GLS) sites at Orchard Boulevard and Plantation Close (EC).

Site for Tender Site Area Maximum Gross Floor Area Estimated number of housing units Top Bid No of bidders
Orchard Boulevard 7,031.4 sqm 24,610 sqm 280 $428,280,980 ($1,617 psf per plot ratio or ppr) 4
Plantation Close (EC) 20,038.2 sqm 56,107 sqm 560 $423,380,000 ($701 psf ppr) 4

Source: URA, HDB, JLL Research

Ms. Chia Siew Chuin, Head of Residential Research, Research & Consultancy at JLL
谢岫君, 私宅市场研究部主管 (新加坡) commented:

Orchard Boulevard

The four-way contest for the site at Orchard Boulevard is subdued compared to the intense nine-party competition garnered by the nearby Cuscaden Road site in April 2018. The top bid, at $1,617 psf ppr for the Orchard Boulevard site, falls 32.0% short of the record price of $2,377 psf ppr set by the Cuscaden Road site for residential development.

While the subject site is attractive in terms of its location, plot size and scale, the tepid response and measured bid prices reflect that developers are cognizant of prevailing market challenges and have factored in the impact of the 60% Additional Buyers Stamp Duty (ABSD) on foreign buyers and higher ABSD rates for investors.

Nonetheless, the smallish plot size and development scale of about 280 units resulting in a price quantum of under $500 million is also manageable and palatable for developers who have a proven track record in building high-end homes. The site also provides developers seeking to acquire land in prime locations with an attractive option, bypassing the trials posed by the private collective sales market.

Given the dampening effect of the stricter ABSD on investor and foreign buyer demand, we can expect that the future development of the subject site will predominantly target local residents who seek high-end homes in the coveted district. Consequently, to attract this highly price-conscious and discerning buyer segment, it will be imperative to incorporate bespoke designs and layouts in various unit-mix options and different sizes that cater to their preferences. This distinction arises from the differing requirements of local buyers compared to foreign buyers.

At a land price of $1,617 psf ppr, the selling price for the residential units on the site could start from $3,200 psf and the breakeven cost is estimated at about $2,800-$2900 psf.

Plantation Close

The land tender for this site closed with only four bidders, which is below expectations, as more developers were expected to participate.

The recent award of the adjacent Plantation Close parcel to Hoi Hup Realty and Sunway Developments in September 2023, which can potentially yield 495 new EC units, could have discouraged some developers from participating in this EC site tender. The new development project on the previously awarded Plantation Close site would benefit from being the first to capitalise on existing demand in the area. Hence, the presence of an already awarded project in such close proximity could have influenced the decision of other developers to explore alternative opportunities.

The top bid of $423,380,000, again submitted by the joint venture between Hoi Hup Realty Pte and Sunway Developments for this site, is a prudent and defensive strategy to maintain their presence and dilute competition in the vicinity. This move also ensures that they can price the future units in an affordable yet profitable manner.

The top bid of $701 psf ppr is just 1.6% above the second highest bid of $690 psf ppr, indicating that competition was tight among the two bidders. The top two bids are all within market expectations.

The launch price for new EC units on the site is estimated to be about $1,400 psf - $1,500 psf.


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