Marina Gardens Crescent site bid ‘too low’, plot not awarded: URA

In a widely watched Government Land Sales (GLS) tender, the sole bid for a 99-year leasehold plot in Marina Gardens Crescent has been rejected as “too low”, so the site was not awarded.

“The sole bid submitted by GuocoLand (Singapore), Intrepid Investments and TID Residential is assessed to be too low,” the Urban Redevelopment Authority (URA) said on Thursday (Feb 8).

The white site in Marina South, designated for residential and commercial development, fetched just one bid of nearly S$770.5 million or S$984 per square foot per plot ratio (psf ppr) at a tender that closed on Jan 18.

The URA’s decision, which came after a longer-than-usual wait for an official tender result, did not surprise market watchers.

Wong Siew Ying, PropNex head of research and content, noted that “several GLS sites that are further from the city, such as in Clementi and Toa Payoh, fetched higher land rates last year”.

The Business Times had reported at the close of the tender three weeks ago that the land rate was significantly below expectations, and that market players did not expect the tender to be awarded. The bid price was nearly 30 per cent lower than the S$1,402 psf ppr that Kingsford Group paid for a neighbouring plot in Marina Gardens Lane in a state tender that closed last June.

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The GuocoLand and the Hong Leong group-related entities’ bid for the downtown plot is also lower than the top bid for a site in a city-fringe locale in the west. A Qingjian Realty-Forsea joint venture offered S$1,191 psf ppr for a Media Circle parcel that was also tendered on Jan 18. URA has awarded the site at that bid, which amounted to nearly S$395.3 million.

Chia Siew Chuin, JLL’s head of residential research, said: “The measured bid for the Marina Gardens Crescent site reflects the cautious outlook towards large sites requiring substantial land and development costs, particularly in emerging and undeveloped districts like the Marina South precinct.”

Notably, a tie-up involving GuocoLand, Guoco Group and Intrepid Investments had earlier bid for the site that was awarded to Kingsford. The consortium was the second-highest bidder at S$985 psf ppr – just a shade above the Marina Gardens Crescent bid. 

Kingsford’s S$1.03 billion plot is zoned for residential use, with commercial space on the first storey. It can generate about 790 private homes, similar to the 775 private housing units for the Marina Gardens Crescent plot.

The Marina Gardens Crescent plot is right next to Marina South MRT station. It can be developed to a maximum gross floor area (GFA) of nearly 783,000 sq ft, about 6 per cent more than the 738,000 sq ft maximum GFA stipulated for the plot that went to Kingsford.

URA launched the Marina Gardens Crescent plot for sale by tender in June 2023 under the confirmed list of the H1 2023 GLS Programme. The site will now be put on the reserve list of the H1 2024 schedule, “to allow interested tenderers to submit applications for the sale of the site with a minimum price that is acceptable to the government”, URA said on Thursday.

Sites on the confirmed list are launched for sale according to schedule, regardless of demand. Sites on the reserve list are launched only on successful application by a developer that has given an undertaking to offer a minimum bid price that is acceptable to the government at tender.

With more supply of new homes in the city to come, PropNex’s Wong said the Marina Gardens Crescent site may not be triggered so soon.

“There are a couple of developments in the city that have not been launched for sale, namely Skywaters Residences and Newport Residences. The ample supply may weigh on developers’ confidence for residential development sites in the city.”

If the site comes up for tender again, “it will be interesting to see if the government will award it next time round… especially if there are three bids or more”, and if bids should come in around the S$984 psf ppr mark, said Leonard Tay, head of research at Knight Frank Singapore.

“After all, if several developers assess the sales potential of homes as being weakened due to the doubling of the foreign buyers’ Additional Buyer’s Stamp Duty rate to 60 per cent, might this not then constitute the new market benchmark for the location?”