Head of research for Singapore at Colliers International attributed the poor response to concerns of increased competition that may arise from the CBD Incentive Scheme unveiled in the URA Draft Master Plan 2019.
The tender results for three sites at Tan Quee Lan Street, Bernam Street and one-north Gateway were all moderate, with the results for the Tan Quee Lan Street site particularly surprising.
“If there was a theme to sum up developers’ mindset from the batch tender results released by the Urban Redevelopment Authority (URA) on 5 September, ‘safety first’ would be quite apt,” said Tricia Song, head of research for Singapore at Colliers International.
She noted that while the site at Tan Quee Lan was widely anticipated to be hotly contested by developers, “it only attracted two bids which turned out to be a bit of an anti-climax”. A partnership of GuocoLand, Intrepid Investments and Hong Realty submitted the top bid of $800.19 million.
Song said the response was surprisingly underwhelming, considering that the nearby Middle Road site received 10 bids.
“We think some developers could have been put off by the hype over the site and expected aggressive bidding for it. In addition, there might be worries about competition from the Middle Road site and the Midtown Bay project.”
The Bernam Street site within the Tanjong Pagar area drew only four bids, with HY Realty offering the top bid of $440.9 million.
Song attributed the poor response to concerns of increased competition that may arise from the CBD Incentive Scheme unveiled in the URA Draft Master Plan 2019. The Scheme encourages developers to convert ageing commercial space into residential and mixed-use space.
Meanwhile, the one-north Gateway site received nine bids. TID Residential submitted the top bid of $155.74 million.
“We can infer from one-north Gateway’s popularity that size is a major consideration among developers – this being the site on the confirmed list that could yield the lowest number of potential units (165 units),” said Song.
This means there is a lower risk of not being able to sell-out within the ABSD timeline of five years.
The URA said a decision on the award of the tenders will be made at a later date, after all the bids have been evaluated.
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