Marina Gardens Crescent bid too low, plot not awarded by URA

Urban Redevelopment Authority, URA, said Thursday (Feb 8), that it had deemed the bids submitted for Marina Gardens Crescent by GuocoLand Singapore Limited (Singapore), Intrepid and TID Residential as being too low.

In an auction that was widely watched, the single bid for the 99-year leasehold site in Marina Gardens Crescent had been rejected due to being too low.

The Marina South white site designated for commercial and residential development received just one bid at S$770.5M or S$984/square foot/plot ratio (psf/ppr) in a tender closing on Jan 18, 2018.

The URA’s decision was not surprising to market watchers, who had been waiting longer than usual for an official result.

The land rates for GLS sites in Clementi, Toa payoh and other areas further away from city have been higher last year.

The Business Times stated at the close three weeks before that land rates were significantly below expectations. Market players also did not expect to win the tender. The bid price for the Marina Gardens Lane plot was S$1,402 PSF PPR, which Kingsford Group had paid in a June 2016 state tender.

The GuocoLand group and Hong Leong-related entities bid on the plot in downtown is also lower than a top bid placed for a site at a city fringe location in the West. Qingjian Realty’s joint venture with Forsea bid S$1,191psfppr for the Media Circle parcel, which was tender on 18th Jan. URA awarded this site at the bid price of S$395.3million.

The measured bid reflects a cautious attitude towards large sites, which require significant land costs and development costs. Especially in new and undeveloped precincts like the Marina South district.”

It is worth noting that a joint-bid by GuocoLand Group, Intrepid Investments and Guoco Group had been made for the Kingsford award site. The consortium, which was second in line at S$985psfppr (just a shade higher than Marina Gardens Crescent), came in as the highest bidder.

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Kingsford’s S$1.03 Billion plot has been zoned for residential uses, with the commercial space located on the first level. It is estimated that it can create 790 private homes. This is the same as the 775 private housing unit for the Marina Gardens Crescent.

Marina South MRT station is directly next to Marina Gardens Crescent. It can be built up to an area of nearly 783,00 sq ft. That’s about 6% larger than the maximum GFA specified for the plot which went to Kingsford.

URA has launched the Marina Gardens Crescent site for tender sale in June 2023 as per the confirmed list of H1 2023 GLS programme. The site will be placed on the Reserve List of the H1-2024 Schedule to allow interested buyers to submit applications to purchase the site for a price below the minimum acceptable to government.

According to schedule and regardless of the demand, sites that are on the confirmed list will be sold. The launch of sites on the reserved list is dependent on the developer’s successful application. This developer must have committed to a minimum price for the tender that the government accepts.

Marina Gardens Crescent might not be activated as soon as expected, given the increased supply of homes to come in the City.

Skywaters Residences in the city and Newport Residences remain unlaunched. The abundance of available residential sites could be a factor in developers’ lack of confidence.

It will be very interesting to see whether the government awards the site the next time around, especially if at least three bids have been submitted. We will monitor if the bids come in at around S$984 psf.

Many developers believe that the increased rate of additional buyer’s stamp duty (ABSD), now at 60%, has weakened the sales potential for homes.

 

 

 


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