CDL joint venture only bidder for Zion Road site; plans to build 290 long-stay serviced apartments if awarded

SINGAPORE: A City Developments Limited (CDL) joint venture was the sole bidder for a site along Zion Road that has been earmarked for the pilot of long-stay serviced apartments.

The joint venture between CDL and Mitsui Fudosan (Asia) – whose parent company is Japan's largest property developer by market capitalisation – placed a bid of S$1,106,888,000 for the 99-year leasehold site.

The tender for the site closed on Thursday (Apr 4). A decision on the award of the tender will be made after the bid is evaluated, said the Urban Redevelopment Authority (URA).

If the joint venture is awarded the tender, CDL said they plan to "explore a mixed-use project" comprising two blocks - one 69 storeys and another 64 - with about 740 residential units for sale, as well as a retail podium.

They also aim to build a 35-storey block with about 290 rental apartment units.

These rental apartments are part of URA's pilot of a new class of long-stay serviced apartments, which was announced in November last year.

These new serviced apartments come with a minimum lease period of three months. Currently, tenants in serviced apartments are required to stay for a minimum of seven days.

Zion Road is one of the two sites where the pilot is running. The other is at Upper Thomson Road.

The Zion Road site is directly connected to Havelock MRT station on the Thomson-East Coast Line and is close to the Central Expressway and Ayer Rajah Expressway.

It is also next to Great World shopping centre.

SERVICED APARTMENT PILOT

ERA Singapore CEO Marcus Chu said the joint venture could be "eyeing the service apartment component" given that Singapore attracts business travellers.

"Additionally, the upcoming development will help refresh the service apartment offerings in the vicinity, as many of the surrounding service apartments are much older. But it remains to be seen if the site will be awarded considering the lower bid price," he added.

Huttons Asia CEO Mark Yip noted that the daily rates for premium serviced studio apartments in the area start from S$300. These rates are "easily 50 per cent higher" than the rental for a one-bedroom condominium unit in the area.

"The developer might position the long stay serviced apartments at mid to premium targeting working professionals on a short term contract and medical tourists as it is not far from Singapore General Hospital, one-north and the National University of Singapore."

Mr Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc (SRI) believes the launch of these serviced apartments is expected to significantly ease rental pressure, particularly for those in "immediate need of longer-term housing solutions".

He added: "The introduction of these new class of serviced apartments could likely alleviate the rental demands of those that are in urgent need, especially those seeking lengthier accommodations."

On Thursday, the tender for another site located at Upper Thomson Road closed, with a sole bid of S$779,555,000 from GuocoLand (Singapore) and Intrepid Investments. 

The Upper Thomson Road is a residential site offering an estimated 940 units, said Mr Yip. This site is not earmarked for serviced apartments.

Another Upper Thomson Road site earmarked for the pilot of long-stay serviced apartments is currently open for tender.