In a surprising turn of events, the Government Land Sales (GLS) tender for a 99-year leasehold plot in Marina Gardens Crescent has failed to secure an award. The Urban Redevelopment Authority (URA) announced on Thursday (Feb 8) that the sole bid, submitted by GuocoLand (Singapore), Intrepid Investments, and TID Residential, has been deemed too low. As a result, the site will now be placed on the reserve list for the first-half 2024 GLS Programme, allowing interested developers to submit applications with a minimum price acceptable to the government.
The white site in Marina South, designated for residential and commercial development, attracted only one bid of nearly S$770.5 million, equivalent to S$984 per square foot per plot ratio (psf ppr). This bid is almost 30% lower than the S$1,402 psf ppr that Kingsford Group paid for a neighboring plot in Marina Gardens Lane during a state tender in June of the previous year. Kingsford's S$1.03 billion plot is zoned for residential use with commercial space on the first storey, capable of accommodating around 790 private homes, similar to the 775 private housing units proposed for the Marina Gardens Crescent plot.
The URA launched the Marina Gardens Crescent plot for tender in June 2023 under the confirmed list of the H1 2023 GLS Programme. Unlike sites on the reserve list, which are launched only upon successful developer application, confirmed list sites proceed according to schedule, irrespective of market demand.
Situated next to the Marina South MRT station, the Marina Gardens Crescent plot offers a maximum gross floor area (GFA) of nearly 783,000 sq ft, approximately 6% more than the neighboring plot that went to Kingsford. Despite its strategic location, the failure to secure a winning bid raises questions about the dynamics of the real estate market.
The bid's rejection may be attributed to various factors, including the proposed land use, site conditions, and relevant sales transactions. The reserve price for Government Land Sale sites is typically set at 85% of the estimated market value assessed by the Chief Valuer. Given the upcoming supply of new homes in the area, with developments such as Marina Gardens Lane, Marina View Residences, Skywaters Residences, and Newport Residences collectively offering about 1,900 new homes, developers may have been cautious in their bidding strategy.
Propertyforsale Pte Ltd Managing Director, JT Chia, had anticipated a more substantial bid for the Marina Gardens Crescent site, expecting it to command at least S$1,100 psf ppr. The significant gap between the expected bid and the actual bid raises questions about developers' confidence in the current market conditions and the sustainability of property prices.
The unawarded bid for the Marina Gardens Crescent plot has added an unexpected twist to the real estate landscape. As developers reassess their strategies in light of market dynamics, the reserve list for the first-half 2024 GLS Programme will likely see increased interest. The outcome of future tenders and the minimum acceptable bid price set by the government will offer valuable insights into the evolving dynamics of Singapore's property market.