URA Releases State Land Sale Sites in Margaret Drive and Media Circle
The Urban Redevelopment Authority (URA) has announced the release of two residential sites for sale on May 30 as part of the first half of the 2024 government land sales (GLS) program. These sites are located at Margaret Drive and Media Circle.
Analysts predict that developers will continue to exercise caution in bidding for these plots, mirroring recent tender exercises amidst a slowing housing market.
The two parcels are on the confirmed list, meaning they are launched for sale according to schedule irrespective of demand. In contrast, reserve list sites are only tendered when a developer submits an offer acceptable to the government.
The site at Margaret Drive in the Queenstown area spans 9,522.3 square meters and is expected to yield 460 private residential homes. It has a maximum gross floor area (GFA) of 39,994 square meters, which includes a minimum of 500 square meters for a childcare center, and comes with a 99-year lease.
The Media Circle site in the Buona Vista area is designated for long-stay serviced apartments with a commercial component on the ground floor. This parcel, on a 60-year lease, covers 5,764.3 square meters and has a maximum GFA of 24,211 square meters, potentially accommodating around 520 long-stay serviced apartments—a new rental category introduced in 2023 to address short-term supply needs.
PropNex head of research and content, Ms. Wong Siew Ying, anticipates stronger interest for the Margaret Drive site due to its prime location in a well-established residential estate near the city fringe. She noted that this is the first GLS residential site in the area since 2017, when Stirling Residences was launched on Stirling Road, drawing 13 bidders and a winning bid of over $1 billion.
ERA chief executive Marcus Chu highlighted the site’s relatively lower development risks due to its manageable size and regular layout. Market experts expect the Margaret Drive site to attract around three bids, with the top bid ranging from $494 million to $537 million, translating to a unit land cost of $1,150 to $1,250 per square foot per plot ratio (psf ppr).
In contrast, the Media Circle site is likely to see a more subdued response from developers, with perhaps only one or two bids, estimated between $222 million and $261 million, or $850 to $1,000 psf ppr. Huttons Asia project director, Mr. Ngiam Juyong, attributes this caution to the exclusive long-stay serviced apartment business model, which requires a longer period to recover the initial capital investment.
Ms. Wong also referenced the tender exercise for Zion Road (Parcel A), the government’s pilot project for this new asset class, which attracted just one bid in April from a City Developments-Mitsui Fudosan partnership at $1.1 billion or $1,202 psf of GFA.
Despite these concerns, Ms. Wong highlighted some benefits of the new asset class, including the potential for recurring rental income and avoiding the five-year additional buyer’s stamp duty deadline associated with residential units.
OrangeTee & Tie CEO, Mr. Justin Quek, noted that the Media Circle site could attract a significant number of tenants working or studying in the area, potentially generating healthy rental income for landlords. He also mentioned future government plans to expand business spaces in one-north, which could increase the local workforce and drive housing demand.
Mr. Chu added that many plots in the one-north area are subject to more detailed government planning, which could see more high value-added firms establishing their presence in Media Circle, further boosting housing demand.
The tender for the Margaret Drive site closes at noon on August 1, while the Media Circle site’s tender closes at noon on September 19.
