IOI Properties Makes Sole Bid of $1.1B for Marina View Site in Singapore

Malaysian developer IOI Properties Group emerged as the sole bidder for a development site near Singapore’s Marina Bay at a government land sale tender that closed Tuesday.

For the Marina View “white site”, which can serve a range of uses including commercial, retail residential and hospitality, IOI entered a bid of S$1.508 billion ($1.1 billion) — matching the reserve price — and no competing offers came forth.

The Business Times had reported in June that an entity linked to IOI triggered the release of the plot near the future Shenton Way MRT station from the reserve list of the government land sale programme.

The solo bid for the site just south of the Asia Square Complex, which is set to combine residential and hotel space with retail and office elements, comes despite demand for luxury housing having hit new highs in recent weeks.

Tender Draws Yawns

The land parcel at Shenton Lane and Union Street measures 0.78 hectares (1.9 acres) and can yield 1,093,925 square feet (101,264 square metres) of gross floor area, meaning IOI would pay roughly S$1,379 ($1,020) per square foot of GFA. A decision on the award of the tender will be made and publicised at a later date, the Urban Redevelopment Authority said Tuesday.

After the tender for Marina View opened on 28 June, Tang Wei Leng, managing director of Colliers Singapore, told Mingtiandi she was anticipating much higher bids than the S$1,379 reserve price, given the site’s prime location in downtown Singapore and the MRT factor.

Under the CBD Incentive Scheme, which is part of Singapore’s Master Plan 2019, city planners seek to transform the central business district from a primarily office-centric area into vibrant mixed-use neighbourhoods, Tang noted at the time, with IOI’s new plot sitting amongst some of the region’s priciest office properties.

The site also fronts a planned linear green space that is set to become part of what city leaders foresee as a “green spine” connecting to the Marina Bay waterfront.

But despite the property’s potential as a live-work-play attraction with a 99-year lease, no more suitors appeared and the reserve price stood as the solitary bid.

Home and Hotel

The terms of the land tender require that at least 51,000 square metres of the property be developed for residential use, not counting any serviced apartment elements. Another 26,000 square metres must be dedicated to hotel rooms or other hotel-related use.

The commercial element can only comprise a small percentage of the building, with the tender allowing for up to 2,000 square metres each of office and retail space.

“We see the opportunity to look at mixed-use development, a blend of two or more land uses such as residential, office, ancillary retail (supporting the community) or hospitality within a single, master-planned development,” Colliers’ Tang said.

In addition to connecting to the future Shenton Way MRT, the site is also close to the Downtown and Marina Bay Interchange transit nodes.

Staying Downtown

The bid for the Marina View parcel is on-brand for IOI, which in 2016 won a nearby white site adjacent to One Raffles Quay for S$2.6 billion ($1.9 billion) after a fierce contest. The company is building a pair of office towers called Central Boulevard at the 1.1 hectare site.

In mid-2017, Hongkong Land paid S$940 million ($682 million) for a 33 percent stake in Central Boulevard, but the joint venture was terminated in 2018 over “non-fulfilment of certain conditions precedent”, leaving IOI to go it alone.

Best known for developing suburban townships in Malaysia, IOI established a presence in Singapore in 2007. Its projects in the city-state include the Seascape and Cape Royale luxury condos in Sentosa Cove and the downtown South Beach mixed-use complex, a joint venture with local builder City Developments Ltd.

Innkeepers Struggle

Singapore’s high-end housing market has been increasingly buoyant this year, as evidenced by local developer Kheng Leong, a unit of UOL Group, agreeing last week to purchase 21 Anderson Road in District 10 for S$213 million.

But the hotel sector has continued to struggle in the wake of the COVID-19 pandemic. Gazetted hotel room revenue during the first quarter of this year was down by 70.5 percent compared with the same period a year earlier — totalling just S$199 million.

While the country has cracked open its borders over the past month, after surpassing 80 percent vacancy amid the novel coronavirus, uncertainty over future hotel demand would have influenced the value of a property where more than a quarter of the floor space must be used for hospitality purposes.