Marina Gardens Crescent plot not awarded because bid was ‘too low’
The only bidder for a 99 year leasehold plot at Marina Gardens Crescent was rejected because it was “too low”. Therefore, the site wasn’t awarded.
Urban Redevelopment Authority (URA): The bid of GuocoLand Singapore, Intrepid Investments, and TID Residential was deemed too low by the Urban Redevelopment Authority.
At a tender which closed on January 18, the white site in Marina South designated for residential and business development attracted only one bid, amounting to S$770.5m or S$984 psf per plot ratio.
Market watchers were not surprised by the URA’s announcement, which was made after a much longer than usual wait for a final tender result.
Last year, land prices were higher for GLS sites located further away from the city. These included Clementi, Toa Payoh and Clementi.
The market participants did not expect that the tender would be awarded at the end of the three-week-old tender. The bid price is nearly 30% lower than what Kingsford Group paid in June last year for a plot adjacent to Marina Gardens Lane.
GuocoLand, Hong Leong and their related entities bid for a downtown plot that is lower than the highest bid for an area in the western city fringe. A joint venture between Qingjian Realty and Forsea offered S$1,191 per square foot per person (ppr) for a Media Circle plot that was also tender on January 18. URA awarded the site to that bidder, which was worth nearly S$395.3 millions.
The cautious bid for the Marina Gardens Crescent site reflects a cautious approach to large sites that require substantial land and construction costs, especially in developing and undeveloped areas like the Marina South Precinct.
A joint venture between GuocoLand and Guoco Group, along with Intrepid Investments, had bid earlier for the site which was awarded to Kingsford. The consortium came in second with a bid of S$985 per square foot per person, just above Marina Gardens Crescent.
Kingsford’s S$1.03billion plot is zoned residential, with commercial space at the first floor. The plot can produce 790 private houses, which is similar to the 775 units of private housing for the Marina Gardens Crescent site.
Marina South MRT Station is just next to the Marina Gardens Crescent plot. The plot can be developed up to a maximum Gross Floor Area (GFA) that is approximately 783,000 sq. ft. This is about 6 percent more than the maximum GFA of 738,000 sq. ft stipulated for Kingsford’s plot.
URA will launch the Marina Gardens Crescent plot to be sold by tender under the confirmed list for the H1 GLS Program in June 2023. The site is now on the H1-2024 schedule reserve list to allow interested bidders to submit an application for the sale of this site at a price acceptable to the government.
The sites on the list of confirmed sites are sold according to plan, irrespective of demand. The sites on the reserve list can only be launched after a successful application from a developer who has committed to offering a bid price acceptable to the government.
The Marina Gardens Crescent may not be activated so soon, as there will be more new homes available in the future.
Skywaters Residences, and Newport Residences are two developments that have yet to be put on the market. Developers may be less confident about residential sites in the city due to an abundance of supply.
It will be interesting to know if the site is put out for tender again. Especially if three or more bids are received, and the bids come in at around S$984 per square foot per person.
If, for example, several developers believe that the sale potential of a home has been weakened by the doubled Additional Buyer’s stamp duty rate of 60 percent, could this then be the new benchmark market standard for the area?
