SINGAPORE – The Urban Redevelopment Authority (URA) has launched the public tender of a commercial site at Beach Road, whose winning bidder must conserve and restore the former Beach Road Police Station on the land.
Sale of the site was triggered after URA last month received an application from a developer who committed to bid at a price of not less than $1.138 billion. Any tender below that minimum bid price will not be considered, URA said in its announcement on Thursday (July 6).
The two-hectare site was available for sale on the reserve list of the first-half of 2017 Government Land Sales (GLS) Programme. It was first put on the GLS reserve list in November 2014.
The site is slated for a predominantly office development of up to 45 storeys, with complementary uses such as residential, hotel and serviced apartments. It has a maximum permissible gross floor area (GFA) of 88,313 sq m, including the old police station building. At least 70 per cent or 61,820 sq m of the GFA must be for office use, while a maximum of 3,000 sq m can be use for retail.
Savills Singapore research head Alan Cheong said last month that a “trophy asset” developed on the Beach Road site could hit the market around 2022 – when there is limited supply of prime office space.
New commercial and hotel developments in the Beach Road/ Ophir Road/Rochor Road area such as DUO and South Beach are rejuvenating the CBD-fringe district. Gross office rents at DUO Tower and South Beach Tower range from S$9.80 to S$11 per sq ft, comparable to Grade-A offices in Raffles Place.
The tender is thus likely to attract larger developers looking to create a flagship development given the site’s size, location and historic old building, said property consultants.
Dr Lee Nai Jia, head of research at consultancy Edmund Tie & Company, has said he expects at least 10 bids for the site, with the winning tender likely to hit close to S$1.2 billion to S$1.3 billion, or about S$1,300 to S$1,400 per square foot per plot ratio (psf ppr). Consultancy Colliers International projects a top bid of S$1.2 billion to S$1.25 billion, or S$1,262 to S$1,315 psf ppr.
Both projections trump the minimum trigger bid of S$1,197 psf ppr by the unnamed developer.
Keen competition for the site is expected from both local and foreign developers. China’s Nanshan Group was reported to have triggered the Central Boulevard site at Marina Bay last year, but did not win it. Malaysia’s IOI Properties Group blew away six contenders to clinch the tender for a record S$2.57 billion or S$1,689 psf ppr.
Tender for the site will close at noon on Sept 28.