JLD tender predicted to yield low bids amidst market caution and scale concerns

Experts attribute the limited bidding pool to factors such as high costs and regulatory complexities.
 

Singapore's highly anticipated Jurong Lake District (JLD) tender was projected to draw limited interest and low bids, according to industry experts.

The tender closed with one bidder group, including CapitaLand Development, CDL, Frasers Property, Mitsubishi Estate Co., Ltd., and Mitsui Fudosan (Asia) Pte Ltd, submitting two separate tenders, each with different concept proposals and requisite documents.


Wong Siew Ying of PropNex said low bids for the JLD site were expected due to market caution, project scale, and required expertise and funds.

PropNex estimated the land price for the entire development at $3.5-3.9b, with Phase 1 alone costing $1.2-1.3b. 

Likewise, Tricia Song, CBRE head of Research, Singapore and Southeast Asia, also anticipated a limited response to the JLD project tender due to its scale and risks. 

They anticipated one to two bids, with top bids around $1,000 psf ppr, factoring in substantial infrastructural and engineering costs for sustainability and integration features.

Justin Quek, CEO of OrangeTee & Tie, said factors that may have limited the bidding pool for the site, include high costs, lengthy development timeline, and complexity due to planning and sustainability conditions set by URA. 

Despite uncertainties, Ying sees this as a chance to secure land in Singapore's second CBD with long-term potential.

She said that the option scheme allows flexible development over eight years post-Phase 1 completion, aligning with market demand. 


Additionally, Mark Yip, CEO of Huttons Asia, pointed out the importance of collaboration among developers to manage the significant costs and complexities of the JLD project.

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The experts all cited the success of nearby projects like J’den in November 2023 indicating demand for homes in Jurong East, with new JLD homes expected to sell at $2,500 psf.


“This could give developers a bit more comfort and security in terms of managing the financial commitment, as well as the risks and complexities that may arise from undertaking a large development,” said Ying.

Song said the high sales performance of the J’den project in November 2023, selling 88% of units at an average price of $2,451 psf, reflected confidence in the location despite market weakness. 


There will be an increased residential space in Phase 1 due to strong demand seen at the J’den launch, said Yip. He also noted Plot 1's strategic location near the future HSR site, suggesting opportunities for service apartments. 

Quek added the site's proximity to key amenities in Jurong East, such as the MRT station and shopping malls, adds to its appeal.

“With no other private residential projects expected to launch in the area any time soon, there may be pent-up demand for homes at this site,” he said.

Moreover, Yip also suggested the master developer's choice of an eight-year development timeline offers flexibility to adjust plans based on market conditions, potentially influencing supply and prices in the area.

“If market conditions are favourable, the master developer can accelerate development plans. The developer may have the ability to influence supply and prices,” he said.

Ying added: “Notably, as a master developer of the three plots, the JV will become a dominant player in JLD, and it could help in securing a key advantage in influencing pricing in that area.”

She noted partners like CapitaLand are likely interested, given their Jurong East presence, which could integrate JLD with surrounding developments. 

“CapitaLand, alongside CDL and Frasers Property, have well-established and diversified real estate experience across the residential, commercial, retail, and hospitality sectors which would bode well for JLD’s development should the site be awarded,” Ying said.



“These companies have superior credentials and strong track records in master planning and developing mixed-use precincts that are vibrant, sustainable and commercially successful; in Singapore and overseas, so we believe the results should be positive,” CBRE noted.