Central Boulevard white site triggered for sale: URA

SINGAPORE – A 1.1ha land parcel at Central Boulevard in the Marina Bay area will be put up for sale by public tender later this month, said the Urban Redevelopment Authority (URA) yesterday, after it received an application from a developer that committed to bid no less than S$1.54 billion for the prime site.

The 99-year leasehold white site will provide continuity in the office market when the development is completed about 2020, said property analysts, adding that the supply of completed offices here is expected to peak next year and taper off from 2018.

“We believe the main motivation behind the triggering of this site stemmed from the potential tightening of prime office supply in the Central Business District by 2020, given the build-up of supply from earlier programmes would have tapered off by then,” said Ms Tay Huey Ying, head of research at JLL Singapore.

The white site, with a gross plot ratio of 13 and maximum gross floor area (GFA) of 141,294sqm (about 1.5 million sqft), was made available from the Reserve List of the Government Land Sales programme. A Reserve List parcel will only be launched for sale if there is sufficient interest, or when a developer places a bid that is acceptable to the Government.

URA said that a minimum of 100,000sqm has to be set aside for office use and a maximum 5,000sqm can be used for retail purposes such as shops and outdoor refreshment areas. The remaining GFA can be used for additional offices, hotel, serviced apartments or residences.

“The market has been anticipating the triggering of this prime site despite concerns around impending supply in 2016,” said Mr Desmond Sim, head of CBRE research in Singapore and South-east Asia. “CBRE expects healthy interest in the plot, with close to 10 bidders, both local and foreign. The plot might see keen competition in terms of pricing.”

Ms Christine Li, director of research at Cushman & Wakefield, added: “A high financial commitment is required as the total development cost could exceed S$2.5 billion after the inclusion of construction costs. The high quantum would likely lead to the formation of joint ventures, as small to mid-sized developers will not have the financial muscle to undertake such a huge project solo.”

Ms Li expects the bids to be in the S$1.54 billion to S$1.8 billion range, which translates to about S$1,000 to S$1,200 per square foot per plot ratio.