Five-party consortium places 2 bids for Jurong Lake District site
A consortium consisting of CapitaLand Development, City Developments, Frasers Property, Mitsubishi Estate, and Mitsui Fudosan (Asia) has submitted two bids, each with different concept proposals, for the master-developer site located in Jurong Lake District (JLD).
Comprising a 25 per cent stake from each of the first three parties and a 12.5 per cent stake from each of the two Japanese companies, this consortium stands as the sole contender for the site following the closure of the state tender on Tuesday (Mar 26).
Utilizing a dual-envelope, concept-and-price tender approach, the Urban Redevelopment Authority, which oversees the 99-year leasehold site, has released only the names of the bidders at this stage, withholding bid prices.
Analysts express little surprise at the absence of additional contenders, citing the cautious sentiment prevailing in the Singapore property market and the associated risks of embarking on a large-scale project with an extended timeline, particularly in the context of prevailing high interest rates.
The project’s initial phase mandates minimum office and residential components. Desmond Sim, CEO of Edmund Tie & Co, describes the consortium as a unifying force, bringing together leading developers in the region and affirming government efforts to establish Jurong as a prominent business district.
The consortium’s participation is expected to incorporate diverse best practices, particularly in sustainability, into this master-developer project.
The site, part of the confirmed list in the first-half 2023 government land sales program, spans three plots of land situated between Jurong East MRT interchange station and the future Jurong Lake District MRT station.
With various stipulations for office, residential, and complementary uses, the site is envisioned to become the largest mixed-use business district outside the city center, fostering urban sustainability and innovation over the next decade to fifteen years.
The successful tenderer for the first phase of development is tasked with constructing a minimum office and residential GFA, with flexibility to adjust further phases according to market demand.
Anticipating robust demand for private homes in the area, analysts project a positive outlook for residential components. However, caution is advised regarding the office segment’s leasing market, which will face intense competition alongside substantial infrastructure costs.
In the concept-and-price tender, proposals are evaluated based on specific criteria, with compelling concepts proceeding to the price evaluation stage.
The master developer’s option period, determining the duration for purchasing the entire land parcel after tender award, offers flexibility alongside incentivization mechanisms to ensure completion of the entire development.
