SINGAPORE – Two leasehold private residential sites in River Valley Green were released for sale on March 11 under the first-half 2024 Government Land Sales (GLS) programme.

The two sites in the prime River Valley residential district can yield about 960 private homes, including long-stay serviced apartments.

The site at River Valley Green Parcel A, which can yield 380 private homes, was launched for sale under the confirmed list. Sites on the confirmed list are launched for sale according to schedule, regardless of demand.

The other plot, Parcel B, which can yield 580 units, including 220 long-stay serviced apartments, is available for application under the reserve list. Such sites are launched only upon successful application by a developer that has given an undertaking to offer a minimum bid that is acceptable to the Government.

PropNex head of research and content Wong Siew Ying said she believes developers may be more interested in the Parcel A site as it has “a smaller development size and there is no requirement to offer long-stay serviced apartments, which may put off those without hospitality-sector experience”.

She added that the Parcel B reserve list plot is appealing, but it may not be triggered any time soon in view of the upcoming supply from River Valley Green Parcel A and the nearby Zion Road Parcel A sites.

The tender for the Zion Road Parcel A plot will close in April 2024. This site, which is near Havelock MRT station, can yield 1,170 units, including 435 long-stay serviced apartments. 

Mr Justin Quek, OrangeTee & Tie’s chief executive, said the River Valley Green Parcel A site may be more desirable as it is purely residential, compared with the larger Zion Road Parcel A site.

He also believes River Valley Green Parcel B may not be triggered for sale soon because “a portion of its units will be for long-stay serviced apartments, which may make the future development less straightforward”.

“There is also another purely residential reserve list site launched earlier at Zion Road Parcel B that is available for application,” he added.

As River Valley Green Parcel A is a prime district plot, Mr Quek said developers will be mindful of higher-for-longer interest rates, macroeconomic uncertainty, and the 60 per cent additional buyer’s stamp duty (ABSD) rate for foreign buyers. 

Nonetheless, there should be healthy developer interest as existing nearby projects, such as Irwell Hill Residences, are nearly sold out.

The Irwell Bank Road GLS plot on which the 540-unit condo now sits was awarded in January 2020 at $583.9 million ($1,515 per sq ft per plot ratio). Irwell Hill Residences has sold more than 99 per cent, or 538, of its units, at an average price of $2,713 per sq ft (psf), PropNex said.

ERA chief executive Marcus Chu sees the River Valley Green Parcel A site attracting up to five bids due to its palatable size and location.

Located near Great World MRT station and Great World City mall, the parcel may also draw strong rental demand due to the site’s proximity to the Central Business District.

“While the revised tiered ABSD clawback rates may offer developers some respite and confidence to bid for sites, the punitive (60 per cent) ABSD rate hike continues to be a hurdle for new home sales,” Mr Chu said.

Currently, developers buying land on or after Dec 16, 2021, pay 35 per cent ABSD that may be remitted upfront subject to conditions, plus 5 per cent ABSD that is non-remittable. If the developer fails to sell all its residential units within five years from the date of buying the land, the 35 per cent remittable component will be clawed back with interest, regardless of the number of unsold units.

With effect from Feb 16, 2024, projects with at least 90 per cent of units sold at the five-year sale timeline will be subject to a lower ABSD remission clawback rate.

The ABSD remission clawback will be reduced by between 1 percentage point and 10 percentage points, depending on the proportion of units sold at the five-year mark, the Ministry of Finance has said.

“For developers keen to explore the serviced apartment component, River Valley Green Parcel B is more manageable as it is half the size of Zion Road Parcel A,” Mr Chu added. 

Mr Lee Sze Teck, senior director of data analytics at real estate agency Huttons Asia, said the River Valley Green Parcel A site may attract up to three bids, with a top bid of between $525 million and $560 million (or between $1,500 psf and $1,600 psf).

“This relatively lower quantum will translate to lower risks for developers,” he said.

“River Valley Green Parcel B is unlikely to be triggered for sale. Developers may want to observe bids for Parcel A,” he added.