Clinching Upper Thomson site could cement GuocoLand, Hong Leong hold over the area
The Upper Thomson area’s latest state tender closure witnessed developers exercising caution, resulting in only one bid being submitted. The joint venture between GuocoLand and Hong Leong Holdings clinched the site with an offer of approximately S$780 million or S$904.60 per square foot per plot ratio (psf ppr), falling just below pre-tender expectations. Consultants had anticipated three to five bids, with the highest bid projected to range between S$1,000 and S$1,100 psf ppr.
This single bid reflects an 8% decrease compared to the land rate of the recently sold Lentor Central site, awarded in September 2023. The Lentor Central plot, secured by a joint venture involving Hong Leong Holdings, GuocoLand, and China Construction (South Pacific) Development Co, was sold for S$435.2 million or S$982 psf ppr.
Analysts suggest that despite potential deterrents related to site-specific requirements, winning the Upper Thomson plot would provide a significant advantage in an emerging area largely dominated by landed housing. Chia Siew Chuin, JLL’s Head of Residential Research, emphasized that securing this plot aligns with the consortium’s defensive strategy to fortify its presence beyond the Lentor neighborhood, facilitating better management of sales and pricing strategies. Excluding the subject site, GuocoLand is currently developing 2,211 units in the Lentor district.
With the bid amounting to S$905 psf ppr, analysts project the launch price for the Upper Thomson (Parcel B) project to range between S$2,000 and S$2,200 psf. This pricing strategy could appeal to local homebuyers seeking to downsize from landed housing in the Springleaf vicinity, as well as HDB upgraders from the Ang Mo Kio and Yio Chu Kang estates.
Spanning 32,023.7 square meters, the Upper Thomson Road (Parcel B) plot is expected to yield 940 units. Notably, the nearby 99-year leasehold The Essence condominium in Chong Kuo Road recorded a median price of S$1,376 psf for new sales since its launch in March 2019. The Essence development, built on a site awarded in 2018, achieved a recent sub-sale transaction at S$1.3 million or S$1,638 psf for an 818 square feet unit in January.
