SINGAPORE – A prime 99-year leasehold site in Holland Drive, the first to be tendered since 2018, drew only three bids on May 14. A consortium led by UOL Group and CapitaLand Development secured the site with a top bid of $805.4 million, translating to a land rate of $1,285 per square foot per plot ratio (psf ppr).

The consortium plans to develop two 40-storey condominium towers with a total of 680 units on the District 10 site, which is adjacent to the One Holland Village mixed-use development.

The winning bid was significantly lower than the $1.21 billion fetched by a neighboring Holland Road site in 2018, indicating a more cautious developer sentiment. Experts attribute this to several factors:

• Economic headwinds: Rising interest rates and a slowing economy have made developers more risk-averse.
• Muted market: New home sales have slumped to a 15-year low, impacting demand for new units.
• Larger site: The Holland Drive site is significantly larger than previous ones, requiring a substantial upfront investment.
• Cooling measures: Government property curbs, such as the Additional Buyer’s Stamp Duty, have reduced foreign buyer interest.
• Upcoming GLS sites: Anticipation of more prime district sites in the second half of 2024 might have dampened bidding enthusiasm.

Despite the lower-than-expected bid, analysts remain optimistic about the project’s potential. The lack of new supply in the Holland Village area and the strong performance of One Holland Village Residences suggest healthy demand for the future development.

Key Points:

• Consortium led by UOL and CapitaLand wins Holland Drive GLS site.
• Bid significantly lower than previous site in the area.
• Developers cautious due to economic conditions, market slowdown, and larger site size.
• Analysts foresee strong demand for the future project despite lower land rate.

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