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Thread: Marina View site among plum offerings

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    Default Marina View site among plum offerings


    Published June 10, 2011

    [B][SIZE="5"]Marina View site among plum offerings[/SIZE][/B]

    [B]It could fetch more than $1.3b; plush Jervois Road site also made available[/B]


    (SINGAPORE) The government has slipped in a few plum sites into its second-half land sales programme, including a low-density private housing site in Jervois Road in District 10 next to the Chatsworth Park Good Class Bungalow Area, and a 'white site' at Marina View, behind UIC Building that will have a minimum office quantum.

    By some calculations, the Marina View site could fetch around $1.3-1.5 billion. This would make it the priciest site on the second-half slate.

    Office industry market watchers expect developers to trigger the release of the 0.78-hectare Marina View site, when it is made available for application in October this year under the reserve list system. It can generate a gross floor area (GFA) of about 1.09 million sq ft, and analysts estimate a net lettable area of about 920,000 sq ft assuming a full-office project.

    'We expect to see strong interest in this site,' said Savills Singapore director of regional capital markets Craig Ward.

    If any party is successful in triggering a release of this site from the reserve list and the government then puts it up for tender, the site could sell for about $1,200-1,400 per square foot per plot ratio (psf ppr) assuming full-office use, and one could expect a completed AAA Grade office building to trade at about $2,700-2,800 psf, Mr Ward estimates. A land price of $1,400 psf ppr would bring office land prices back to their peak in 2007, when MGPA bid $1,409 psf ppr for a nearby site which it has developed into Asia Square Tower 1.

    Mr Ward said developers will bid for the latest Marina View site on offer because of strong rental demand for AAA Grade office space in Singapore. 'There's no issue of AAA Grade space in terms of supply. However, demand for such space could lead to a rise in vacancies for some Grade B buildings as tenants upgrade to AAA Grade offices.'

    Jones Lang LaSalle's head of markets Chris Archibold argues that it was sensible for the Ministry of National Development (MND) to have put the Marina View site on the reserve list as part of its strategy of ensuring a steady pipeline of office supply. 'There is visibility of office supply in Singapore until about 2015.'

    If the latest Marina View site is successfully triggered for release soon after it is made available in October, the tender for the site would close in first-half 2012 and the project on the site could be ready around 2017, Mr Archibold reckons.

    'A lot of jobs in the financial sector are coming to Hong Kong and Singapore. But Hong Kong has no more supply pipeline in its major prime CBD office districts of Central and Admiralty. So financial institutions' ability to expand in Hong Kong will be constrained and Singapore stands to benefit from spillover demand from these institutions by building a steady office pipeline.'

    The Ministry of National Development said yesterday that the Marina View site will provide the opportunity for the market to initiate more prime office space in the CBD for development if needed.

    It noted that additional supply is also expected from the development by the Khazanah-Temasek tie-up, M+S Pte Ltd, of four nearby plots at Marina Bay and another two sites at Ophir Road/Rochor Road. These six plots can potentially generate a further 5.4 million sq ft GFA, part of which will be for office use to support the further growth of the island's financial sector, MND said.

    MND has also moved a commercial site in Paya Lebar from the existing reserve list to the H2 2011 confirmed list, where sites are tendered out according to a pre-stated schedule. It will be launched for tender next month - to keep up the momentum to turn the area into a commercial hub outside the CBD. 'That's an intelligent strategy to ensure office availability out of town for rent-sensitive occupiers,' said Mr Archibold. 'Also in order to make Paya Lebar successful, you need a critical mass as soon as possible.'

    Among the residential sites, Nomura Singapore identified the confirmed list sites at Jervois Road (which can yield about 140 homes) and Alexandra Road near Redhill MRT Station (545 units) as likely to attract the most interest from developers given their choice locations.

    DTZ's SE Asia research head Chua Chor Hoon identified a plot at Chestnut Avenue/Almond Avenue that can be developed into 35 landed homes - this is the only landed housing site in the H2 slate - as among her top picks in the confirmed list. Another choice site is a condo plot near Bartley MRT Station and Maris Stella High School; it is near an earlier site that drew eight bids in March.

    On the reserve list, the top catches include a condo plot near Bishan MRT Station next to an earlier site that drew a record 19 bids in February. MND has also introduced a condo plot each near Potong Pasir MRT Station and Jurong East MRT Station. 'With the development of the Jurong area into another commercial centre outside the CBD, we can expect strong interest from residential developers in this site,' said Ms Chua.

    Also on offer in the reserve list will be a new white site in Novena that will have minimum hotel component, and a new hotel plot at Rangoon Road. The latter is near Farrer Park MRT Station and the Connexion - a 20-storey development that will include a hospital, medical centre and hotel.

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