Marina Gardens Crescent site ‘too lower’ bid, plot not given: URA
At the close the tender three week ago, market players didn’t expect the contract to be awarded. The bid amount was about 30 percent lower than a previous state tender, closed in June 2016, where Kingsford Group purchased a plot next door in Marina Gardens Lane for S$1,402 PSF PPr.
The GuocoLand Group and Hong Leong Group-related entities’ offer for the central city plot is also less than the top price bidder on a site at a city fringe in the west. Qingjian Realty/Forsea Joint Venture offered S$1,191 PSF ppr on a Media Circle Parcel that was also submitted to tender on Jan 18. URA awarded this site at the bid price of S$395.3m.
In a GLS (Government Land Sales) tender which attracted wide attention, the only bid received for a 99-year leasehold parcel in Marina Gardens Crescent had been rejected due to being “too little”. The site was therefore not awarded.
Urban Redevelopment Authority has deemed that the single bid from GuocoLand Singapore Intrepid Investments TID Residential and TID Residential submitted is too low.
A tender for a white site in Marina South that was intended to be developed as residential and commercial space, closed on the 18th of January. Only one bid totaled S$770.5million or S$984per square foot per plot (psfppr), a price which is close to S$770.5million.
The URA’s final decision, made after a prolonged wait for an official bid result, was not a surprise to market observers.
Last year, GLS sites situated further out of the city, in Clementi & Toa Payoh for example, achieved higher land rates.
The measured offer for the Marina Gardens Crescent Site reflects the cautious attitude towards large, complex sites requiring considerable land and building costs. This is particularly true of districts in development or emergence like Marina South.
GuocoLand Group Intrepid Investments and Guoco Group bid together for the Kingsford-awarded site. The consortium bid S$985 psf per ppr as the second highest bidder, just a hair above Marina Gardens Crescent.
Kingsford’s S$1.03billion parcel is zoned for residential uses, with the commercial space located on the first level. It is estimated that it can create 790 houses for private use, comparable to the Marina Gardens Crescent plot’s 775 housing units.
Sites that appear on the approved list are released for sale in accordance with schedule, regardless if demand is high or low. Sites in the reserve list may only be sold after the developer successfully submits an application and has pledged to provide a minimum price for the government to accept at tender.
Marina Gardens Crescent will not likely be activated soon as the city is expected to have more supply.
Skywaters Residences (in the city) and Newport Residences (in the city) are two of those developments which have not yet been made available for sale. The large number of available residential development sites can affect developers’ confidence.
If the government decides to award the site again, it would be interesting to find out if this time there were three or more bids and if prices came in at S$984 psf.
It is possible that if developers judge the market potential for a location to be weakened because of the increase in the Additional Buyer’s Stamp duty to 60%, this could then become the new standard.
Marina South MRT lies right beside the Marina Gardens Crescent. It has a gross floor area (GFA), which can be increased to nearly 783,000 sf, or about 6 percent more than that of the Kingsford site.
URA began selling the Marina Gardens Crescent Plot by tender in 2023 according to the confirmed list for the H1 GLS Programme 2023. The site was placed on the Reserve List of the H1 schedule 2024 so that interested tenderers could submit their applications to purchase the site for a minimum price which is acceptable to Government.