Sale of Marina South state land site for 790 units could see bids around S$1b

A MARINA South site zoned for residential development with some commercial use has been launched for sale, in a state land tender that analysts expect to see drawing up to 5 bids coming in at S$1 billion or more.

The parcel is one of the most attractive plots in the Government Land Sales (GLS) programme this year, market watchers said, and will kickstart development of the Marina South precinct.

Situated along Marina Gardens Lane, the plot of land can yield about 790 residential units and up to 8,073 sq ft of commercial space, on maximum gross floor area (GFA) of 738,113 sq ft.

The land sale is part of the government’s plans to explore various possible housing options in the 45-hectare Marina South precinct, such that it eventually becomes a mixed-use residential neighbourhood comprising residential, hotel, retail and some office uses, said the Urban Redevelopment Authority (URA) in its statement on Monday (Dec 5).

“Taking into account the merits, current market conditions as well as that this is a relatively large site with about 790 units, we think this site could attract 3-5 bidders and a top bid of S$1.0 billion or S$1,355 psf ppr,” said Tricia Song, head of research, South-east Asia at CBRE.

This compares to the nearby and larger white site tender at Marina View which in March 2021 fetched S$1.508 billion or S$1,379 per square foot per plot ratio from just one bidder, Song said. The earlier site sold offered over 1 million sq ft of GFA, including over 900 residential units and 500 hotel rooms.  

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Song noted that developers had turned cautious and selective in bidding for land as private housing transactions slowed with higher mortgage rates, economic slowdown and recent cooling measures. Developers are “preferring smaller sites to larger ones exceeding 500 buildable units, though bid prices have so far been holding up”, she said.    

Propnex Realty’s head of research and content Wong Siew Ying similarly noted: “Despite being hungry for land, we expect developers to move cautiously keeping in mind the high borrowing cost and construction cost, as well as the upcoming supply of new homes in the central business district,” she said. She expects that developers will form consortiums to jointly bid for the site, due to the large quantum

“Apart from the Marina View project, some of the upcoming redevelopment projects that will offer residential units include the former AXA Tower at 8 Shenton Way, the former Maxwell House in Tanjong Pagar, and the former Fuji Xerox Towers in Anson Road.”

Steven Tan, chief executive of OrangeTee & Tie, believed the site would draw “keen interest from developers”, given that whoever takes it on may enjoy “first-mover advantage” as it was the first parcel put up for sale in the up-and-coming Marina South Precinct.

“There should be strong interest in this site from developers given the limited supply in the vicinity coupled with the excellent location,” he said.

“Envisioned as a sustainable, car-lite and community-centric residential precinct, Marina South will be characterised by pedestrian-friendly streets, a comprehensive cycling network, a pedestrian mall and an underground pedestrian network connecting the two Thomson East Coast Line stations at Gardens by the Bay and Marina South,” the URA said in its press statement.

URA also plans to build a series of elevated pedestrian connections to connect the precinct to Gardens by the Bay and to the coast.

When fully developed, the Marina South area could potentially have more than 10,000 dwelling units, URA said, with access to amenities such as parks, public spaces, recreational options, shops and F&B outlets, as well as community facilities such as childcare centres.

The new launch is also right next to the upcoming Marina South MRT station.

The tender closing for the site will be batched with an executive condominium site at Tengah Plantation Loop and a commercial and residential site at Tampines Avenue 11, both of which will be launched in the later part of December 2022 under the confirmed list of the H2 2022 GLS programme, said URA.