Bidding war: Developers likely to team up to bag tender for Jurong Lake District site
The tender for the master developer site will close on 26 Mar 2024.
Foreign and local developers will likely team up and form joint ventures or consortiums when bidding for the master developer site at Jurong Lake District, which has been recently launched for sale by public tender.
This is because the scale of the development set for the site would require “major developer consortiums with deeper pockets” and a “longer period of investment,” said Justin Quek, deputy CEO of OrangeTee & Tie, adding that it will take about over a decade to develop the three plots in the 6.5-hectare White site in JLD.
Lee Sze Teck, senior director for research at Huttons, had a similar sentiment saying, "only well-established and capitalized developers will be able to participate” in the bidding war for the White site.
Wong Siew Ying, PropNex’s head of research and content, said the bidders for the JLD site will likely have a “strong track record in developing mixed-use projects, and have the capability and resources to commit to the long-term.”
Huttons estimates that the land cost for the site will range between $1,000 and $1,500 psf ppr or $3.93b to $5.89b.
“Construction costs can easily add another 50%. The total estimated development costs could be $5.89b to $8.84b,” added Lee.
Meanwhile, CBRE’s estimate for the development land cost was “at least S$1,300 psf ppr.”
“Based on the total GFA of 3.93 mil sq ft, the total land cost would exceed S$5 bn. We estimate Phase 1’s minimum requirement is about 35% of total space, and hence could cost S$1.8b to $2b. In totality, the office will make up at least 40% of this development, while Residential is capped at 45% of total development,” said Tricia Song, CBRE’s head of research for Southeast Asia.
EDMUND TIE’s Head of Research and Consulting, Lam Chern Woon, believes the tender will attract around three to four bids, but bidding competition will likely be fierce.
“There are great advantages to being the first-mover, given the potential upside of the whole locality, especially if prospects brighten for the resumption of a High-Speed Rail between Singapore and Kuala Lumpur,” Lam said.