A Marina South site zoned for residential development with some commercial use has been put up for sale in a state property tender anticipated to attract up to five bids worth S$1 billion or more, according to analysts.
According to market observers, the parcel is one of the most appealing plots in this year of Government Land Sales (GLS) programme and it will kick start the development of the Marina South precinct.
On a maximum gross floor area (GFA) of 738,113 sq ft, the plot of land can yield approximately 790 residential units and up to 8,073 sq ft of commercial space.
The land sale is part of the government's approach to scrutinise various housing possibilities in the 45-hectare Marina South precinct, aiming to eventually transform it into a mixed-use residential neighbourhood with residential, hotel, retail, and some office uses, according to a statement issued by the Urban Redevelopment Authority (URA) on Monday (Dec 5).
"Considering the merits, current market conditions, and the fact that this is a fairly large site with estimated 790 units, we believe this site could draw 3-5 bidders and a top bid of S$1.0 billion or S$1,355 psf ppr," said Tricia Song, head of research, South-east Asia at CBRE.
This compares to the nearby and larger white site tender at Marina View, which fetched S$1.508 billion or S$1,379 per square foot per plot ratio from just a single bidder in March2021, according to Song.
Song acknowledged that developers became more vigilant and specific in their land bidding as the speed of private residential transactions decelerated due to higher mortgage interest rates, an economic downturn, and recent cooling measures. Developers are "favouring smaller sites to larger ones with more than 500 buildable units, though bid prices have held up so far," she said.
Wong Siew Ying, the head of research and content of Propnex Realty, agreed: "Notwithstanding the desperation for land, we foresee developers to act prudently, bearing in mind of the high borrowing and cost of construction, as well as the upcoming supply of new homes in the central business district." Due to the large quantum, she anticipates that developers will establish consortiums to collectively bid for the site.
"Aside from the Marina View project, some of the upcoming residential redevelopment projects that will offer units include the former AXA Tower at 8 Shenton Way, the former Maxwell House in Tanjong Pagar, and the former Fuji Xerox Towers in Anson Road."
Steven Tan, CEO of OrangeTee & Tie, reckoned the site will pique the strong interest of developers because whoever buys it will gain "first-mover advantage" because it was the first parcel offered for purchase in the burgeoning Marina South Precinct.
"Due to the restricted supply in the vicinity on top of the excellent location, there should be significant interest in this site from developers," he said.
"Marina South is visualised as a sustainable, car-lite, and community-based residential district. It will be equipped with pedestrian-friendly pavements, a strategic cycling network, a pedestrian mall, and an underground pedestrian network that links the two Thomson East Coast Line stations at Gardens by the Bay and Marina South," the URA mentioned in a press statement.
In addition, the URA intends to construct a series of elevated pedestrian connections to attach the precinct to Gardens by the Bay and to the coast.
The Marina South area could possibly have over 10,000 housing units when completely constructed, according to URA, with availability to facilities such as nature reserves, public areas, recreational options, shops and F&B outlets, and community amenities such as childcare centres.
The new launch is also side by side with the upcoming Marina South MRT station.
According to URA, the bid closing for the site will be grouped with an executive condominium site at Tengah Plantation Loop and a commercial and residential site at Tampines Avenue 11, both of which will be opened in late December 2022 under the corroborated list of the H2 2022 GLS programme.
Credit: Business Times