Top bid of S$2.57b for Central Boulevard white site

SINGAPORE — The keenly watched tender of a plum 1.1ha land parcel in the Marina Bay area closed yesterday after receiving seven bids, with the top bid of S$2.57 billion setting the record for a white site under the Government Land Sales (GLS) programme.

Wealthy Link, a unit of Malaysia’s IOI Group, emerged top in the contest with a bid that translates into S$1,689 per square foot per plot ratio (psfppr), showed data from the Urban Redevelopment Authority (URA) yesterday.

The top bid was 16.4 per cent higher than the second-highest of S$2.21 billion by Mapletree, and 34.5 per cent above the lowest bid of S$1.91 billion put in by an OUE-led consortium.

Analysts had expected the bids to be in the S$1.54 billion to S$1.8 billion range.

“This is the highest bid recorded for a white site in the GLS programme, beating the last record set by the sale of the white site on which Asia Square Tower 1 sits, at S$1,409 psf set almost 10 years ago,” said Mr Moray Armstrong, CBRE Singapore’s managing director for advisory and transaction.

“Many developers who are interested in this site are aware of the potential fierce competition in this tender. However, the top bid is higher than expected in the current market condition,” said SLP International’s head of research and consultancy Nicholas Mak.

The 99-year leasehold site on Central Boulevard, with a gross plot ratio of 13 and maximum gross floor area (GFA) of 141,294sqm, was made available from the Reserve List of the GLS programme.

It was put up for sale by public tender after the URA received an application from a developer that committed to bid no less than S$1.54 billion for the prime site. A Reserve List parcel will only be launched for sale if there is sufficient interest, or when a developer commits to bid at a price acceptable to the Government.

The URA said 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.

JLL’s Singapore head of research Tay Huey Ying said based on the highest bid price, the developer may be looking at a full office development with the breakeven ranging from S$3,000 to S$3,100 psf.

The site will provide continuity in the office market when the development is completed about 2020, as the supply of completed offices here is expected to taper off from 2018 after peaking next year.

However, Cushman & Wakefield’s research director Christine Li expects the developer to fully maximise the permitted retail area and include a high proportion of food and beverage space given the current scarcity of dining options there.

“Hotel use is not likely given the high price tag paid. In addition, there is also established competition from The Westin Singapore at Asia Square, and as the current hotel supply pipeline is adequate in light of the weak corporate traveller’s market,” she said.