Bids of well above $1 billion - Marina Bay

Blue-chip property players from across the region are expected to do battle for a prime piece of Marina Bay land released for tender yesterday.

although one expert tips $2 billion or more - are expected for the 1.02ha site behind One Shenton and The Sail @ Marina Bay condominiums.

A project of about 40 storeys can be built on the land, but 70 per cent of the gross floor area must be given over to offices. The rest of the space can hold more offices, hotel rooms, homes or shops.

Mr Nicholas Mak, the director of research and consultancy at Knight Frank, expects bids to come in at between $830 million and $1.09 billion, based on recent government land sales and an assumed rental yield of about 6.5 per cent to 7.5 per cent.

This range works out to $580 to $760 per sq ft per plot ratio (psf ppr), he said.

But Ms Tay Huey Ying, Colliers International’s director of research and consultancy, expects even higher bids - ‘upwards of $1 billion, or $750 psf ppr’, with the winning bid ‘likely to be above $2 billion’.

The likely contenders ‘include all the major local blue-chip developers’, Mr Mak said.

These would be CapitaLand, Keppel Land, Lippo Group, Far East Organization and City Developments, which is the developer behind One Shenton and The Sail.

Foreign funds could also tie up with local developers for the tender bid, he said.

The consortium building the nearby Marina Bay Financial Centre (MBFC) - Keppel Land, Hongkong Land and Cheung Kong Holdings - may also be interested, said consultants.

‘Other office players who have yet to have any presence in this new downtown of the future may also take this opportunity to form consortiums to participate in this tender,’ said Ms Tay.

She added that a winning bidder may want to build homes or service apartments along with the required offices.

But Mr Mak, who estimated that the project could accommodate 400 two-bedroom units, said homes were an unlikely option because the developer would also have to allocate more space for carparks.

The site, which opens up directly to a public open space, can be built up to 200m, or over 40 storeys.

It will be connected to surrounding developments such as One Raffles Quay, One Marina Boulevard, the MBFC and One Shenton through a network of underground walkways and second-storey links, the Urban Redevelopment Authority (URA) said.

The site will be served by a common services tunnel, a system of underground tunnels that house and distribute utility service lines such as power and telecommunication cables, the URA added.

This means future tenants will have an uninterrupted supply of major utilities and emergency back-up services.

The site - part of the Government’s plan to rejuvenate the Marina Bay area - will be awarded based solely on the tendered price, said the URA.

Developing the land ‘will help to build up the critical mass of office space in the Marina Bay area and develop the area as an international business and financial hub’, it added.

Source: The Straits Times, 31 May 2007