Huttons’ Comments on Zion Road (Parcel A) and Upper Thomson Road (Parcel A and B) GLS sites

4 December 2023

The Zion Road (Parcel A) and Upper Thomson Road (Parcel A) are the first two GLS sites to pilot serviced apartments with a minimum stay of 3 months. Both sites are directly linked to Havelock and Springleaf mrt stations, respectively on the Thomson East Coast line (TEL) which connects the Northern part of Singapore to the Central and East. This makes it convenient for tenants to move to different parts of the island.

However not all developers have the expertise to operate a serviced apartment and it may limit the participation to only a few select bigger developers. The capital expenditure for serviced apartments will be front loaded and requires ample liquidity from developers. The current manpower tightness in the hospitality sector requires a rethink of how service can be delivered better with less manpower.

The separate strata titles for the residential and serviced apartments will make it attractive to developers who may look to divest the serviced apartments to their REITs.

The Zion Road (Parcel A) serviced apartments will attract more of working professionals on a short term contract and medical tourists as it is not far from SGH, one-north and NUS.

It is directly connected to the Havelock MRT station and has commercial space on the first level. Mixed use sites with a direct MRT connection is highly sought after by buyers as it offers superior convenience. The project may potentially be as high as 50 storeys high with a SHD of 240m. Homes on the higher floors will have towering views towards the south. It could see a top bid of more than $1,300 psf ppr. The number of developers may be capped at 3.

The Upper Thomson Road (Parcel A) site will probably attract students on internships and owners whose homes are under renovation.

Although the Springleaf precinct has been identified as a new housing area following the completion of the TEL, the area is an untested site for serviced apartments and developers will have to price in significant risks.

The commercial space at Parcel A will provide much-needed amenities, boosting the appeal of staying in this private residential enclave near vast stretches of greenery. These two sites are probably the best in the Springleaf precinct as there is direct access to the MRT station. Huttons Data Analytics estimate more interest in Parcel B than Parcel A as it is a pure residential site. However Parcel B is much larger and the quantum may come close to $1 billion. The top bid for the two sites may not exceed $1,000 psf ppr and there may be up to 3 developers for the sites.