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Analysts expect Marina View site to create buzz
COOLING measures or not, the Marina View white site made available for application under the Government Land Sales (GLS) reserve list will be keenly deliberated on by developers, thanks to its central location and its potential to yield several hundred hotel rooms amid the easing supply of future hotel rooms.
The site could fetch top bids of between S$1,380 and S$1,650 per square foot per plot ratio (psf ppr); this translates to S$1.5 billion to S$1.8 billion if it were to go on the market now, consultants told The Business Times. If triggered for sale, the site could attract anywhere from four to eight bids, some reckon.
Located in Marina Bay, the white site is envisaged as a mixed-use development which could yield about 905 residential units and 540 hotel rooms, supported by retail and food-and-beverage use. The 99-year parcel comprises two plots - a 7,817.6 sq m land parcel, and an underground space 18 sq m in size. In all, the site has a maximum gross floor area (GFA) of 101,629 sq m.
In addition to Marina View, two other sites were released for sale under the GLS Programme for the second half of the year; the Urban Redevelopment Authority (URA) launched a 99-year site in Kampong Java Road, while the Housing & Development Board launched a 99-year, executive condominium (EC) site in Tampines Avenue 10. The former can yield 435 units and the latter, 695 EC units.
Given the Marina View's location in the Downtown Core and the future Shenton Way MRT station at its doorstep, the site would be attractive to major developers, developers with hotel interests, consortiums or real estate trusts, analysts said.
And with the supply of residential units in the area expected to be limited in the future, most units from new projects are likely to be snapped up, said Lee Nai Jia, senior director and head of research at Knight Frank Singapore.
The white site was previously made available for sale through the reserve list since October 2011, but was removed in 2015 for a "review of its development plans", URA said on June 11, 2015.
Previously, some 70 per cent of the maximum permissible GFA of 1.09 million sq ft had to be set aside for office space. Under the current requirements, a maximum of 2,000 sq m (nearly 21,530 sq ft) can be alloted to optional office space. In addition, up to 2,000 more sq m can be set aside for commercial use such as shops and restaurants.
Christine Li, head of research at Cushman & Wakefield Singapore, expects that the hotel component aspect of the site would make it more attractive to developers compared to pure residential sites. She said: "The outlook for the hospitality sector is improving due to the increasing number of tourist arrivals and limited pipeline of new hotel rooms.
"If triggered for sale, the site will be hotly contested by developers who wish to increase their exposure to the hotel market."
Hotels in the vicinity include the So Sofitel and The Westin. Noting that the hotel supply has tapered in general, Tricia Song, head of research (Singapore) at Colliers International, said: "URA may have assessed that it is timely to have such a site on the reserve list to test the market."
According to industry data, the estimated hotel room supply is expected to grow by 2.9 per cent next year, and by 0.9 per cent in 2020, easing from the boom in prior years.
Preliminary estimates from the Singapore Tourism Board show that visitor arrivals rose 7.5 per cent year-on-year in January to August as 12.61 million travellers came to Singapore's shores.
Meanwhile, potential purchasers for the residential units include investors and senior business executives who work in the area.
Despite the property cooling measures which kicked in on July 6, there will still be some degree of interest in the three sites under the GLS, with the Marina View land parcel being particularly attractive, said Knight Frank's Mr Lee.
Still, "(land bids) will probably be more reflective of the current conditions, compared to the beginning of the year, when the bids reflected future pricing", he added.
Ms Song said: "Developers have generally been more circumspect about land acquisition following the roll out of new cooling measures in July. We expect developers to continue to adopt a cautious stance in evaluating this latest slate of sites that have been launched."
Executive director of ZACD Group, Nicholas Mak, said the Marina View land parcel could attract a "moderate level of participation" if launched for sale within the next few months.
He added: "Many developers have acquired a significant amount of residential land in the past two years. These developers would have committed much resources to the acquisition and development of their projects and would have limited resources for further large acquisition."
He went on to note that the most comparable land sale to Marina View was the white site at Central Boulevard, which was sold in November 2016 to IOI Properties Group for about S$2.57 billion, which worked to a land rate of S$1,689 psf ppr.