Who will win the Marina View white site?

ON Monday, the Urban Redevelopment Authority launched the tender for a white site in Marina View that can generate about 905 private homes and 540 hotel rooms, as well as up to 2,000 square metres (21,528 sq ft) of office space and 2,000 sq m of space for other commercial uses (including retail and F&B).

This follows the government's announcement on June 10 that the 99-year leasehold site had been triggered from the reserve list of the first-half 2021 Government Land Sales Programme following a successful application from an unnamed developer that has committed to bid at least S$1.508 billion or S$1,379 per square foot per plot ratio (psf ppr) at tender.

BT reported on June 18 that an entity linked to Bursa Malaysia-listed IOI Properties Group has been tipped as the party that triggered the site.

IOI Properties has so far not commented on this. What could be the possible motivations for IOI Properties to trigger the release of the site?

Observers says one possibility is that the group is looking to move some money out of Malaysia.

Perhaps it also hopes to enlarge its presence in Singapore's Marina Bay locale.

The Marina View plot is near the site on which the group is developing the IOI Central Boulevard Towers, a predominantly office project. The development will have about 1.26 million sq ft of Grade A office space in two towers. It clinched the site at a state tender that closed in November 2016 and the project had been targeted for completion by 2022.

However, work has been delayed and industry observers say this is due to technical complexities in the project's construction and the Covid-19 outbreak, among other issues.

The S$1,379 psf ppr minimum bid price that IOI Properties has committed to bid for the Marina View plot is seen to be on the low side.

For instance, it is below the S$1,463 psf ppr fetched for a "residential with commercial at first storey" plot at the far end of the CBD, in Bernam Street in 2019; the plot is now being developed into the One Bernam project.

Of course, competition at the tender for the Marina View plot, which will close on Sept 21, can be expected to drive up the winning bid.

How far will IOI Properties go to clinch this site?

To boost its chances and better manage risks, the group will probably take a partner, or perhaps more than one partner - so long as it holds the majority.

IOI Properties' partners for its past projects in Singapore include Ho Bee (for two condo projects in Sentosa Cove) and City Developments (for the South Beach mixed-development project).

IOI had intended to take Hongkong Land as a 33 per cent partner for its Central Boulevard project after it secured the site, but the plan did not come to fruition.

The chances of Hongkong Land getting together with IOI again for the Marina View site would not be high, especially given that the site is slated for predominantly private housing and hotel development. Hongkong Land specialises in prime office and luxury retail property.

However, Hongkong Land's fully-owned subsidiary MCL Land is an established residential developer in Singapore. That said, MCL Land may be more inclined to partner City Developments Ltd (CDL). After all, the duo joined forces to bag two 99-year sites in a row at state tender closings in April and May this year.

CDL co-developed the maiden residential project in Marina Bay, The Sail@Marina Bay condo, on a plot that it clinched at a URA tender that closed in May 2002. It later roped in AIG as 50 per cent partner. So CDL may be keen on another condo project in the area. Moreover the group is experienced with developing hotels. Although the hotel business has been hit by the pandemic, CDL may still find it feasible to develop a hotel in the Marina Bay area on a longer-term investment horizon. When things improve, it could potentially offload the hotel to its sponsored hospitality trust.

CDL, if it decides to participate in the Marina View tender, may find no compelling reason to partner IOI Properties. The feeling may well be mutual.

As for Ho Bee, embarking on a big residential and hotel project in Singapore - may not fit into its current business strategy.

IOI Properties may have to find a new partner for its Marina View tender bid. This could be a Chinese developer already operating in Singapore.

Of course, there is no guarantee that IOI Properties (and its partner, whoever that may be) will emerge as the highest bidder at tender.

After all, some industry watchers point to the "triggerer's curse" for reserve list sites; it is said that the party that is successful in applying for a site's release seldom gets hold of the plot at the actual tender.

A case in point would be the Central Boulevard plot that IOI won in late 2016. BT had reported then that Nanshan was the party that had triggered the plot from the reserve list.

For the Marina View plot, the other bidders who could give IOI Properties a run for its money at the tender include the Ng family's Far East Organization and Sino Group (the latter owns two hotels nearby: The Fullerton and The Fullerton Bay).

Residential developer UOL Group, which also has a hotel subsidiary, Pan Pacific Hotels Group, may also be keen on the Marina View site. Other potential contenders include GuocoLand, Allgreen Properties and Pontiac Land Group.

And not to mention the Chinese developers operating here - including Qingjian Realty, MCC Land, Nanshan, Logan and CSC Land Group (a unit of China Construction (South Pacific) Development Co.

Word in the market is that there are new-to-Singapore property groups from China that are keen to embark on projects here.

Will IOI Properties suffer from the triggerer's curse for the Marina View site? Or will it prove to be an exception? One theory is that perhaps the group has no intention of clinching the Marina View site in the first place.

This is how one market watcher interprets IOI Properties' strategy: "Triggering the Marina View plot, and the resulting tender launch and close, all help to create some excitement about the locale. And this could help spark leasing deals at IOI Central Boulevard Towers."

READ MORE: Thin home supply in Downtown area may stir more interest for Marina View site, triggered at S$1.51b