Marina Gardens Crescent site not awarded as bid was too low
Highly-publicized Government Land Sales (GLS), the only bid for a leasehold plot of 99 years in Marina Gardens Crescent, was rejected as being too low. As a result, the site has not been awarded.
Urban Redevelopment Authority said on Thursday (8th February) that the single bid submitted by GuocoLand Singapore (Singapore), Intrepid investments and TID residential is deemed too low.
A tender closed on 18th January received only one bid for the white site, Marina South, which is designated as a residential and commercial area. The bid was S$770.5million or S$984per square foot per plot (psfppr).
The URA decision, which came as a result of a prolonged wait for the official tender results, was not viewed by market observers as terribly surprising.
Last year, several GLS locations that were further from the City, such as Clementi and Toapayoh, had higher land prices”.
The Business Times said at the end of the auction three weeks earlier that the land rate had been significantly lower than expected and that players on the market did not anticipate the awarding of the bid. The bid price is nearly 30% lower than the S$1,402 per square foot per person that Kingsford Group spent for a neighboring plot on Marina Gardens Lane, in a state-run tender that ended in June.
The GuocoLand-Hong Leong joint venture’s bid for the central city plot is also less than the highest bid made by a group of entities in the western suburbs. Qingjian Realty – Forsea joint partnership offered S$1,191 for each square foot of Media Circle, which was also bid on January 18th. URA has now awarded the parcel at this bid. It was almost S$395.3 Million.
“The measured bid for Marina Gardens Crescent reflects the cautious view towards large sites requiring significant land and development costs. This is especially true in districts that are emerging and have not been developed, like the Marina South area.”
Noteworthy, GuocoLand had previously bid with Guoco Group and Intrepid Investments for the Kingsford site. The consortium placed second at S$985psfppr, just a little bit above Marina Gardens Crescent’s bid.
Kingsford’s S$1.03billion land plot is zoned to residential use with commercial space on first storey. It could generate 790 homes similar to those on the Marina Gardens Crescent.
Marina South MRT is located right next to the Marina Gardens Crescent. It is possible to develop the plot to a maximum of approximately 783,000 square feet (GFA), which is 6 percent more than what was stipulated in the Kingsford agreement.
URA announced the Marina Gardens Crescent parcel for sale in June of 2023, under the confirmed H1 GLS program list. The site has been placed on the reserve schedule of H1 2024, allowing interested parties to submit bids for the sale with a minimal price that the government accepts.
The confirmed list is launched according to the schedule regardless of demand. Sites are only launched on the Reserve List if a developer has successfully applied and committed to offer the government a price at which they will accept.
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Marina Gardens Crescent could be delayed due to the upcoming supply of new housing in the city.
Skywaters Residences & Newport Residences haven’t been put up for sale yet. It is possible that the abundance of residential development sites may affect developers’ confidence.
The government may award the site if it is put up for tender a second time, especially if more than three bids were received. If bids are below S$984/sf/ppr, it will be monitored.
The doubled rate of Additional Buyers Stamp Duty for foreign buyers (ABSD) to 60% has been cited by several developers as a factor in reducing the sale potential of home.
