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White site at Marina View triggered from Reserve List


By Nisha Ramchandani

The Urban Redevelopment Authority (URA) will launch for public tender a white site at Marina View after an unnamed developer made a successful application for the site's release from the Reserve List.

The 99-year leasehold site - which can yield about 905 private homes, 2,000 square metre (sq m) gross floor area (GFA) of commercial space and 540 hotel rooms - will be released for sale on June 28. The white site was on the Reserve List of the H1 2021 Government Land Sales (GLS) programme.

The developer has committed to bid a price of at least S$1.508 billion at tender, which works out to about S$1,379 per square foot per plot ratio (psf ppr), given the maximum GFA of 101,629 sq m.

However, analysts expect the winning bid will ultimately be higher. Knight Frank's head of research Leonard Tay highlighted that the trigger price is lower than other comparable GLS residential sites in the Downtown Core, clocking 10.2 per cent and 5.7 per cent less than the winning bids for the Tan Quee Lan Street and Bernam Street sites respectively.

Still, "when the tender closes 12 weeks from the launch, it is expected that the bids will be above all these previous GLS sales on a psf ppr basis, especially if the developer who wins the tender is intent on constructing a luxury class residence with a six-star hotel that would be positioned to benefit in a post-coronavirus world," Mr Tay added.

Desmond Sim, deputy chief executive of Edmund Tie & Company, said that the triggering of the site from the Reserve List is testament to developers' desire to build up their landbank. "It's a good indication that some developers out there are looking to replenish their landbank," said Mr Sim.

Given the large quantum for the site and that smaller sites are presently proving to be more palatable for developers, Mr Sim doesn't rule out consortiums coming together to bid for the site.

Pointing to the site's appealing location in the Downtown Core with the future Shenton Way MRT station at its doorstep, Wong Siew Ying, PropNex's head of research and content, said: "We expect the site to potentially garner good interest among developers which have deeper pockets and have experience in residential or mixed-use developments or perhaps those with hotel interests."

The upcoming hotel supply in the Downtown Core is modest, with 350 of the 5,029 hotel rooms under construction as at end-Q1 2021 situated in the Downtown Core Planning Area, she highlighted.

Meanwhile, analysts expect robust demand for residential units at the site, given that the last major residential project launched in the area was Marina One Residences back in 2014.

Wong Xian Yang, Cushman & Wakefield's head of research (Singapore), said: "With more family offices setting up shop in Singapore, demand for prime residential units within the CBD is expected to rise."

Mr Wong went on to point out that Marina One Residences has sold some 90 per cent of its units thus far, with transactions gathering pace last year. In 2020, 185 new and resale units at Marina One Residences were sold , up from 140 units in 2019.

Based on year-to-date transacted prices of comparable residential properties as well as the trajectory of the property prices, "the future residential units in the development on Marina Bay could be sold between S$2,500 and S$2,800 psf," estimates Nicholas Mak, head of research and consultancy at ERA. The caveat to this, however, would be that no fresh cooling measures are implemented by the government prior to the launch of the project.

"The site at Marina View will further inject more homes into the CBD, supporting the government's vision of making the CBD vibrant after working hours," said Huttons chief executive Mark Yip. "With a hotel component as part of the development, it shows the confidence of the party who triggered the site that global travel will resume soon and it is key to secure a first-mover advantage by acting now."

And with a cap of 2,000 sq m for commercial space, office space - if proposed as part of the mixed-use development - will likely cater to small-and-medium enterprises or flexible space solutions, CBRE's director of research (South-east Asia) Catherine He added.

Adapted from: The Business Times, 11 June 2021


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