For the first time in 12 years Singapore’s Urban Redevelopment Authority (URA) has declined to award a land plot offered under the government’s land sale programme, brushing aside the sole bid from a GuocoLand-led consortium for a site in the city-state’s Marina South area as “too low.”
Malaysia’s GuocoLand, together with its Singapore cousins at Hong Leong Holdings and Hong Leong’s TID Residential tie-up with Japan’s Mitsui Fudosan had bid S$770.5 million ($574 million) for the 1.73-hectare (4.3-acre) Marina Gardens Crescent site in a tender which closed last month.
With that offer, which was equivalent to S$984 per square foot of built area, falling 30 percent short of the price fetched in July for the adjacent Marina Gardens Lane site, the URA has now put the Marina Gardens Crescent project on its reserve list for the first half of this year, where interested developers may, “submit applications for the sale of the site with a minimum price that is acceptable to the government.”
Despite this being the first instance of a failed URA sale since 2011, analysts had predicted the collapse of the tender, considering the low price and the prime location of the site in Singapore’s central business district.
High-End Housing Loses Momentum
The 99-year leasehold Marina Gardens Crescent plot is approved for development of up to 782,978 square feet (72,741 square metres), comprising 775 condos, 64,580 square feet of retail space, and at least 5,380 square feet of floor area for a childcare centre.
With its potential to be linked to an MRT station, and its status as only the second plot to go on sale in the Marina South precinct, the Marina Crescent site had been considered one of the highest-profile parcels in the URA’s current government land sale programme.
The last time that the URA had cancelled a state land tender was in November 2011 when it declined to award a commercial site in Paya Lebar to the sole bidder, UOL Group and its Singapore Land subsidiary.
For the Marina Gardens Crescent site, Wong Siew Ying, head of research and content at Propnex Realty, said her firm does not see the project going back on the market soon given the current market for luxury homes in the city centre.
“In view of the supply of upcoming new homes in the area, we think the site may not be triggered [for sale] so soon,” said Wong. “The adjacent Marina Gardens Lane GLS site can yield an estimated 790 new homes.. [and] there are a couple of developments in the city that have not been launched for sale. The ample supply may weigh on developers’ confidence for residential development sites in the city.”
GuocoLand, Hong Leong and Mitsui had not commented on the change in status of the tender by the time of publication.
Media Circle Site Awarded
Wong said Singapore’s additional buyer’s stamp duty for foreigners, which increased to 60 percent from 30 percent in April of last year, as well as the lack of schools in Marina South, may have tempered demand for high-end homes in the area.
In the same announcement on Thursday, the URA awarded a site in Queenstown’s One-North area to the highest bidder, a joint venture between China’s Qingjian Group and Forsea Residence, a Singapore-based firm backed by Chinese state-run construction giant CCCC.
The JV had offered S$395.3 million for the mixed-use residential and commercial plot, which works out to S$1,191 per square foot of gross floor area, or 21 percent more than the rejected Marina South bid.