Frasers Property-led group puts in sole bid for Media Circle serviced apartment site at S$461 psf ppr
This is below estimates from market watchers for a top offer ranging between S$650 psf ppr and S$1,100 psf ppr
A LONG-STAY serviced apartment site in Media Circle drew a single bid of S$120 million, or S$460.8 per square foot per plot ratio (psf ppr), from a Frasers-led consortium, when the Urban Redevelopment Authority (URA) tender closed on Thursday (Sep 19).
The sole bid from a group comprising FCL Land, Padawan MC and Empire One North Property came in far below estimates from market watchers for a top bid ranging between S$650 psf ppr and S$1,100 psf ppr for the parcel near the one-north office hub.
Padawan MC is linked to Boustead Projects, while Empire One North Property has ties with Sunray Group Holdings.
Before the tender closing, up to three bids were expected for the sale of the first state land plot dedicated to long-term serviced apartments, a new rental category labelled SA2 that was introduced last year to help meet market demand.
Leonard Tay, Knight Frank Singapore’s head of research, said: “It remains to be seen whether the site will be awarded to this sole bidder, or whether the bid will be deemed too low. Perhaps the authorities should consider that the developer had priced in not only the land tenure of 60 years, but also the risk of the unknown, where long-stay serviced apartments have yet to prove viable in Singapore, regardless of the site being situated in an employment zone.”
The muted interest in the Media Circle site could have also been due to how it is not near any MRT station, and developers may be mindful that more high-density residential developments will be built in the Media Circle area, noted Wong Siew Ying, PropNex head of research and content.
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Justin Quek, OrangeTee & Tie’s chief executive officer, pointed out: “There are already a handful of hospitality-related developments (nearby), including serviced apartments at Citadines Fusionopolis Singapore, a co-living space at lyf one-north Singapore, and the hotel Citadines Connect Rochester Singapore, which are nearer to public transport options, retail, and dining establishments compared to this site.
“Coupled with the shorter 60 years lease, these factors may have been priced into the sole submitted bid.”
The Media Circle plot can yield 520 apartment units with commercial use on the first storey. It sits on a 5,764.3 square metre (sq m) plot of land, with a maximum gross floor area of 24,211 sq m.
Two other sites with SA2 elements have been put up for sale so far, both combining residential housing with serviced apartments. The first plot tendered at Zion Road was awarded to a City Developments Ltd-Mitsui Fudosan tie-up which placed the sole bid of S$1.1 billion, or S$1,202 psf ppr, in April. The large site can house up to 1,170 residential units, including 435 serviced apartments, on the edge of the prime River Valley residential neighbourhood.
The second SA2-type site at Upper Thomson saw no interest at all, with the tender closing with no bids in June. The poor response was attributed to developers being deterred by risks associated with the still-untested rental category, which would require them to have specialised management expertise.
The Media Circle site tendered on Thursday is one of four residential sites coming up in the immediate area.
Media Circle (Parcel A) and Media Circle (Parcel B) are expected to be launched for sale in November 2024. They can yield a total of about 830 private residential units.
Another site in Media Circle was awarded to Qingjian Realty and Forsea Residence in February after the joint venture placed the winning bid of S$395 million, or S$1,191 psf ppr.
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