The Urban Redevelopment Authority (URA) has rejected the sole bid for a 99-year leasehold plot in Marina Gardens Crescent, Marina South, citing that the offer from GuocoLand (Singapore), Intrepid Investments, and TID Residential was “too low.” The white site, designated for residential and commercial development, received only one bid of nearly $770.5 million or $984 per square foot per plot ratio (psf ppr) in a tender that closed on Jan 18.
Key Points:
- Low Bid and Market Expectations: The bid of $984 psf ppr was significantly below market expectations, with market players expressing doubts about the tender being awarded. The bid price was nearly 30% lower than the $1,402 psf ppr that Kingsford Group paid for a neighboring plot in Marina Gardens Lane in a state tender last June.
- Comparison with Other Sites: The bid for Marina Gardens Crescent was lower than the top bid for a city-fringe locale in the west. A Qingjian Realty-Forsea joint venture secured a site with a bid of $1,191 psf ppr for a Media Circle parcel in the same tender on Jan 18, and the URA awarded that site.
- Cautious Outlook and Development Costs: Analysts suggest that the cautious outlook towards large sites requiring substantial land and development costs, especially in emerging districts like Marina South, contributed to the measured bid for the Marina Gardens Crescent site.
- Previous Bid and Future Prospects: The consortium involving GuocoLand, Guoco Group, and Intrepid Investments had bid for the site awarded to Kingsford, offering $985 psf ppr, just slightly above the Marina Gardens Crescent bid. The Marina Gardens Crescent site will be put on the reserve list for the H1 2024 GLS Programme, allowing interested tenderers to submit applications with an acceptable minimum price.
- Supply and Demand Dynamics: With more upcoming supply of new homes in the city, developers’ confidence in residential development sites in the city may be influenced. The ample supply, along with factors such as the doubling of the foreign buyers’ Additional Buyer’s Stamp Duty rate, could impact market dynamics.
Conclusion: The rejection of the sole bid for the Marina Gardens Crescent site highlights the challenges and cautious sentiment in the property market, particularly for large sites with substantial development costs. The decision to place the site on the reserve list for the next GLS Programme reflects a wait-and-see approach, allowing for potential future bids that meet the government’s acceptable minimum price. The outcome also provides insights into developers’ considerations amid evolving market conditions.