http://www.businesstimes.com.sg/sub/...77540,00.html?

Published November 1, 2011

URA releases Marina Bay white site on reserve list

By UMA SHANKARI


(SINGAPORE) The Urban Redevelopment Authority (URA) released the detailed sales conditions for a new mixed-used, or 'white', site at Marina Bay yesterday.

The land parcel, which is at the corner of Marina View and Union Street, is being offered for sale under the reserve list of the government's land sales programme for H2 2011.

Some 70 per cent of the maximum permissible gross floor area (GFA) of 1.09 million square feet has to be set aside for office use so that Singapore can 'continue with (its) momentum to grow Marina Bay into an international business and financial hub', URA said. The remaining GFA can be developed for additional office use or other uses such as residential, retail or hotel.

The land parcel is the third sale site released for sale at Marina View. The first two white sites at Marina View were sold in 2007.

The project on the first sale site (Asia Square Tower 1) was completed earlier this year, while the development on the second sale site (Asia Square Tower 2) is currently under construction, and is scheduled for completion in 2013.

More office space is also due to come up nearby from a tie-up between Temasek Holdings and its Malaysian counterpart Khazanah Nasional. That project, which will comprise two office towers with some retail space as well as apartments, is likely to be completed by mid-2016.

Developers interested in purchasing the site released yesterday can now apply to URA for it to be put up for tender.

Under the reserve list system, the government releases a site for sale only if an interested party submits an application with a minimum price that is deemed acceptable.

Analysts expect that the site will be triggered only next year.

'I don't think it (the land parcel) will be triggered this year,' said Cushman & Wakefield Singapore vice-chairman Donald Han. 'The market is now expecting a downside to office rents.'

Png Poh Soon, Knight Frank's head of research and consultancy, noted that in Q3 2011, office rents across the island remained flat as companies become more cautious when reviewing their office occupancy needs.

'Based on our forecasting model, if the sovereign debt crisis persists further, and is followed by a significant slowdown in Singapore's economic growth, and against a backdrop more than 10 million sq ft of new supply in the next four years, office rents may correct by some 15 per cent year on year,' Mr Png said.

Cushman & Wakefield's Mr Han expects the site to be sold next year. But he added that an opportunistic developer could trigger the tender this year to take advantage of the current softer commercial land values.

Capital values for office space have fallen by 15-20 per cent since mid-2011, Mr Han said.