SINGAPORE: The Marina Gardens Crescent white site fetched a lower bid land rate than the Media Circle site in one-north despite being located in the prime downtown area, raising eyebrows among industry experts.

Responding to the two government land sales that concluded on Thursday, analysts expressed surprise at the underwhelming bidding at the Marina Gardens Crescent, noting that the top bid at the downtown white site was 24 per cent below its initial estimates.

A “white site” refers to a piece of land the government earmarks for redevelopment or new development. The term is used to distinguish these parcels of land from other types of land designations, such as residential, commercial, or industrial zones, and reflects the open possibilities for development that these sites represent as they are designated for comprehensive and often mixed-use developments.

Typically considered prime locations within urban areas, white sites fetch top prices, given their potential for significant transformation and flexibility in land use.

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Wong Siew Ying, the Head of Research and Content at PropNex Realty, told Singapore Business Review (SBR):

“Bidding interest among developers continues to be cautious, following on from what we witnessed in 2023. In somewhat of a highly surprising twist, the Marina Gardens Crescent white site, in downtown Singapore fetched a top bid land rate that is lower than that of the Media Circle site.”

The consortium of GuocoLand, Hong Leong’s Intrepid Investments, and TID Residential secured the Marina Gardens Crescent site with a sole bid of $770.5 million, translating to $984 per square foot per plot ratio.

However, this bid was notably 30 per cent lower than the $1,402 psf ppr offered by CNQC Realty and Forsea Residence for the Media Circle site, totalling $395.3 million. The discrepancy in these bids has fueled discussions about the factors influencing developers’ strategies in the current real estate landscape.

Tricia Song, real estate services firm CBRE’s Head of Research for Singapore and Southeast Asia, attributed the deviation in the expected bidding price to the actual top bid to developers’ general risk aversion towards “large and investor-focused sites” in the city-state amidst a challenging macroeconomic environment.

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Song also noted the deteriorating developer sentiment for city sites requiring substantial capital outlay and facing uncertain end-user demand post-April 2023 cooling measures. Ongoing market uncertainties have led to the deferral of planned city project launches.

As for the Media Circle site’s robust performance, Lee Sze Teck, Senior Director for Data Analytics at Huttons Asia, told SBR that the stronger-than-expected results signal developers’ confidence in the demand for new homes in one-north and its tight supply situation.

He emphasized that no new supply of homes for sale is expected in the area next year, with the other Media Circle site designated for long-stay serviced apartments.

Predictions for future condo prices at the Marina Gardens Crescent site vary, with CBRE estimating a range of $2,000 to $2,100 per square foot, while PropNex expects selling prices to breach the S$2,500 psf mark.

For the Media Circle site, new homes are anticipated to sell for $2,350 to $2,400 psf, according to both agencies.