Allgreen Properties Makes $730.1 Million Bid for Zion Road GLS Site
Allgreen Properties, the owner of Great World mall, has submitted the top bid of $730.1 million for the Zion Road GLS site. This 99-year leasehold plot, known as Zion Road Parcel B, saw a lackluster bidding interest but still managed to attract a bid that analysts say was within market expectations.
The site, released for sale by the Urban Redevelopment Authority, required a minimum bid of $604.6 million to be considered. The tender closed on July 18, with Allgreen’s bid coming in 20.8% higher than the minimum.
This bid translates to a land rate of $1,304 per square foot per plot ratio (psf ppr). Zion Road Parcel B can yield 610 new private homes and follows the recent sale of an adjacent site, Zion Road Parcel A, which introduced a new class of long-stay serviced apartments.
The $1,304 psf ppr bid for Parcel B is 8.5% higher than the $1,202 psf ppr bid for Parcel A, awarded to a City Developments-Mitsui Fudosan joint venture for $1.1 billion in April 2024. Analysts attribute the higher bid for Parcel B to the absence of a requirement for long-stay serviced apartments, making the project less complex and risky.
Ms. Chia Siew Chuin, JLL’s head of residential research for Singapore, noted that bidding interest was tepid due to potential competition from other nearby GLS private housing sites. Including long-stay serviced apartments from Zion Road Parcel A and developments from River Valley Green parcels A and B, about 2,740 new private homes are slated for the area. An additional 470 units could be added if the River Valley Green Parcel C plot is triggered for tender.
Another factor influencing the bids was the requirement to build a public park and a pedestrian side gate with a covered walkway linking the project to a planned covered linkway along Kim Seng Road, adding to development costs.
The Zion Road site was one of three residential plots whose GLS tenders closed on July 18. The 375-unit Canberra Crescent site in the suburbs drew slightly more interest, likely due to potential upgrader demand from nearby HDB estates. A partnership between Kheng Leong and Low Keng Huat (Singapore) submitted the top bid of $279 million, or $793 psf ppr, for this plot.
This bid is significantly higher than previous bids for nearby sites, reflecting pent-up demand and limited new private home supply in the area, as noted by Knight Frank research head Leonard Tay. However, only three bids were received for the Canberra Crescent site, below the average number of contenders for residential sites in 2023, indicating developers’ reduced risk appetite amid market challenges.
SL Capital (8), a subsidiary of Sustained Land, submitted the top bid of $278.9 million, or $841 psf ppr, for the 355-unit De Souza Avenue plot. This site, located near Bukit Batok Nature Park and Bukit Timah Nature Reserve, saw a lower-than-expected bid due to its distance from an MRT station and competition from nearby projects.
Given the slow sales in recent months, developers are not in a hurry to adjust prices. However, if interest rates are adjusted downwards, developers are expected to quickly re-enter the market.
