Group comprising CapitaLand, CDL, Frasers Property, Mitsubishi Estate and Mitsui Fudosan (Asia) had placed two bids for massive mixed plot
THE government’s ambitious plan to create Singapore’s second Central Business District in the Jurong East region has hit a snag. A five-member consortium’s bid for a mega white site that would kickstart development of the upcoming Jurong Lake District (JLD) has been rejected as it was “too low”, and the tender will not be awarded, the Urban Redevelopment Authority (URA) said on Friday (Sep 13).
The tender for the 6.5-hectare site closed on Mar 26 with a sole bidder submitting two concept proposals. The heavyweight consortium comprised five major players: CapitaLand Development, City Developments Ltd (CDL), Frasers Property, Mitsubishi Estate and Mitsui Fudosan (Asia).
The master developer project encompassed three plots of land to be built up over 10 to 15 years, which would house at least 1.5 million square feet (sq ft) of office space, up to 1,700 residential units, and close to 800,000 sq ft of space for other uses such as retail and food and beverage.
“After evaluating both concept proposals, one of the proposals was thereafter shortlisted,” said the URA. “However, the tender has not been awarded as the shortlisted concept, at the tendered price of S$6,888.90 per square metre (sq m) of gross floor area (GFA), was assessed to be too low.” This works out to around S$640 per square foot per plot ratio (psf ppr), which would imply a price tag of about S$2.5 billion for the land.
The URA announcement came almost six months after the tender closed. At the time of the tender’s close, analysts had pitched bids in the range of S$900 to S$1,000 psf ppr. Market talk subsequently picked up that the bids submitted were low, reflecting the substantial risk that developers would be taking on in an area untested as a major commercial district. But those in the industry had expected the tender to be awarded nonetheless, so as to kickstart development of the JLD.
A spokesperson for the consortium said in a statement issued on Friday night: “The tender for the master developer site at (JLD) marked the first strategic partnership among five of Asia’s leading developers.
Source : https://www.businesstimes.com.sg/property/jurong-lake-district-tender-mega-site-not-awarded-s640-psf-ppr-bid-too-low