THE Urban Redevelopment Authority (URA) has released a Zion Road site for sale from its reserve list, after receiving an application committing to a bid not lower than about S$604.6 million.

The launch of the tender for Zion Road (Parcel B) comes on the heels of URA’s recent sale of a larger neighbouring site in Zion Road. Parcel A was awarded to a City Developments Ltd-Mitsui Fudosan joint venture (CDL-Mitsui JV) at its sole bid of S$1.1 billion or S$1,202 per square foot per plot ratio (psf ppr).

CDL-Mitsui’s bid for the Parcel A site was both below expectations and 30 per cent lower than a comparable state land site across the road.

Zion Road (Parcel B) comes out of the reserve list in the Government Land Sales (GLS) programme for the first half of 2024. Reserve list plots are only released for sale if a developer puts in an offer of a minimum price that is acceptable to the government and if there is sufficient market interest.

The reserve Zion Road site, which can yield some 610 new private homes, was triggered for sale after a developer made an application to commit to submit a bid at the minimum price of S$604,567,890, URA said on Monday (Apr 22). It did not disclose the identity of the developer.

The minimum price of S$604.6 million translates to a land rate of about S$1,080 psf ppr, which is 10 per cent lower than Parcel A’s S$1,202 psf ppr price, said Tricia Song, CBRE head of research, Singapore and South-east Asia.

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“In our opinion, this is a very attractive minimum land rate, notwithstanding the weak appetite of developers recently,” she said.

The second Zion Road site is smaller than the first one sold, and does not come with a requirement to build a new category of serviced apartments – called SA2 – as part of the development.

“Without the SA2 component and at about 60 per cent the GFA (gross floor area) of Parcel A, Parcel B poses lower development risk and should warrant a higher land rate. We expect the CDL-Mitsui JV to be interested in defending the area, and more developers to be interested in this plum site.”

CBRE anticipates that there could be three to four bids for the plot, with a top bid price of S$1,300 to S$1,380 psf ppr or about S$730 million to S$770 million.

Wong Siew Ying, head of research and content at Propnex Realty, said the triggering of the site was unexpected, in view of the recent award of the Parcel A site, and with the tender of a nearby plot in River Valley Green still open.

This could reflect developers’ confidence in home-buying demand in that area, given the site’s proximity to 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,” said Wong.

Lee Sze Teck, senior director of data analytics at Huttons Asia, said: “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.”

The land parcel at Zion Road has a site area of 9,285.9 square metres (sq m) and a maximum gross floor area of 52,002 sq m.

The tender comes amid plans by the Singapore government to make 5,450 residential units available via the confirmed list of the H1 2024 GLS programme. This is the largest supply of confirmed list units since the H2 2013 GLS programme.

The tender will close in July 2024.