URA recently announced the 99-year leasehold site along Marina Gardens Lane to bid on under the 2H2022 government Land Sales (GLS) programme. The results of the tender are highly anticipated due to its prime location in downtown and is the first of a number of sites that will be opened for tender within the Marina South precinct.
This Marina Gardens Lane GLS site is zoned residential and commercial space is located on the first floor. It could produce 790 residential units, and 775 sq meters (8,073 sq feet) or commercial area.
Kassia condo floor plan will feature 280 residential units on a 150,840 sq ft plot in various configurations ranging from one to four bedrooms.
The prospect of paying more than a billion dollars to purchase the site which has no existing facilities like schools could be a risk for certain developers. But, this can be mitigated with the chance that the building could be a landmark structure that is an integral part of Singapore’s sprawling city skyline.
It is stated in the URA tender documents stipulate that the proposed development on Marina Gardens Lane Marina Gardens Lane site must be integrated into that of the Marina South MRT Station. Therefore, the future residents will benefit due to its close accessibility to public transportation. Additionally, they will be able to take in stunning perspectives from the Straits of Singapore, the Marina Reservoir and Gardens by the Bay as the site is situated between two the bodies of water and the gardens that are a showcase.
Most importantly More importantly, The Marina Gardens Lane site is situated in the Marina South precinct and URA is preparing to transform the precinct that is currently not developed. It is believed that the Marina Gardens Lane site is the first parcel of land in the precinct that has been put up to tender. So, the winning bidder will have a first-mover advantage to begin the process of developing this prime land area.
URA announced that a new site located in Marina South will be launched for tender in June next year as part of the GLS programme in 1H2023. The white site located at Marina Gardens Crescent HTML2is located next to Marina Gardens Lane. Marina Gardens Lane site. It is located next to the Marina Gardens Lane site. Marina Gardens Crescent site can provide 775 residential units as well as 6000 square meters (64,584 sq feet) that is commercial property.
Developers should be confident of URA’s vision regarding The Marina South precinct will come to fruition, particularly considering that the cost of development of Marina Gardens Lane Marina Gardens Lane site is likely to be substantial due to its size and location in downtown. Developers must also consider the possibility that prospective buyers are open to looking beyond the undeveloped condition of the region and believe in the vision of URA for the precinct.
But, URA and the Singapore government have a stellar experience in the execution the development plan as well as transformational visions. The neighboring Marina Bay area serves as an excellent example.
URA’s vision of Marina South
The 55ha Marina South precinct is located just beside Gardens by the Bay and Marina Barrage. The location is planned by URA to become a mixed-use community that includes retail, residential and hotel, office and office spaces. When it is completed, Marina South is expected to be home to 10,000 people.
Marina South is well-served by several MRT stations, including Marina South, Gardens by the Bay, Marina Bay, Downtown and Shenton Way. This is in line with URA’s goal of Marina South to be a environmentally sustainable and car-free precinct which is pedestrian-friendly and has plenty of public spaces that are landscaped and cycle paths.
The area is also designed to be a neighbourhood of just 10 minutes in which residents can satisfy their needs throughout the day with only a short stroll from their residence. Facilities will be located within mixed-use buildings and will be easy to access via public spaces as well as important pathways for pedestrians.
The absence of amenities currently available In particular, schools.
This Marina Gardens Lane GLS site is mostly surrounded by vacant space because it’s the first site to be offered for tender within the Marina South precinct. Apart from Marina South MRT Station, there are a few facilities within a 1-km distance that can accommodate families.
There aren’t any supermarkets, food courts or shopping centres within walking distance. Additionally, there are there are no schools within a two-kilometre distance. However, the winner to purchase this Marina Gardens Lane site must create an early learning development center with a minimum of 500 square m (5,382 sq feet). Gross floor space (GFA) that will be used by the childcare center cannot be calculated as part of the area of 750 square meters (8,073 sq feet) allowance in commercial property.
Marina Bay Sands, Marina Bay Financial Centre and Gardens by the Bay are the closest neighbors. Marina Bay Residences located just 1km away and is the closest condominium. Other condominiums within a 2km distance comprise Marina Bay Suites, Marina One Residences, One Shenton, Robinson Suites, Lumiere and 76 Shenton.
The empty parcels are likely to be released gradually to tender as part of URA’s strategy of the Precinct. A white site on Marina Gardens Crescent, which is located near the site in question, site will be put up for tender in June.
The latest rules on the size of units for Central Area
URA recently released new rules to be in line with its goal to achieve its goalof creating a active Central Area (which includes the Marina South precinct) by encouraging live-in families to move in. The new rules require that at least 20% of units in a new non-landed residential project within the Central Area must have net internal areas that is 70 sq m or more (753 sq feet). That includes any residential portion of a mixed-use community. The new regulations will come into effect on January 18 2023.
Downtown cores tend to draw investors rather than owner-occupiers because of the absence of amenities for families. This is why developers tend to construct more one-bedroom and studio apartments in their downtown developments.
The new rules limit the amount of small units that developers are allowed to build within this Marina Gardens Lane site. In this way, developers must ensure that any future developments on the site is also able to attract owners-occupiers. One of the factors that will help is URA’s main goal to create more families living throughout central areas. Central Area. Therefore, URA has set up policies to promote the development of mixed-use developments in the region.
Large site means higher development risk for developers
It is believed that the Marina Gardens Lane site is an extensive land parcel measuring 12,245 square meters (131,805 sq feet) with the maximum GFA of 68.573 sq meters (738,120 sq feet).
A larger site requires more money because of the higher cost of land and construction. This can increase the risk of development for developers who could take the chance to manage risk by forming the possibility of a joint venture with a different developer or even a construction company. While joint ventures may reduce the risk of development, they could cause a variety of problems and risk.
Market experts have estimated that the top price for this site to be between $1,360 to $1,490 for each plot, which amounts into a land cost that ranges from $1.003 billion to $1.1 billion. If we assume a maximum price that is $1.05 billion and a profit rate of 20% and a profit margin of 20%, the homes located on this Marina Gardens Lane site have an estimated value of around $2,600 per square foot.
Tender documents from URA stipulate that the design of the proposed development has to be scrutinized through The Design Advisory Panel. Therefore an iconic and exceptional design fitting for the prominent site is likely. A unique design like this will increase construction costs along with the complexity of construction, and could raise the risk and cost of development.
Developers have to complete and sell each residential unit in their development within five years after they purchase the land. If they are not able to complete the task and they fail to do so, they’ll have to pay an additional buyer’s stamp tax which is 35% on the land’s price. The site is expected to produce 790 residential units meaning that there will be pressure on the winner to sell all units by the date.
The position in the highly regarded Marina South precinct could make the housing units within the development’s upcoming to be status symbols.
It is predicted that the competition will get hotter.
There are currently four vacant sites in the vicinity of four vacant sites that are located near the Marina Gardens Lane GLS site. These four parcels of land share identical plot proportions 5.6 as the main site as well as the same zoning for residential and commercial on the first floor.
The bidder who wins The Marina Gardens Lane site can anticipate fierce competition when URA opens the four plots to bids. The level of competition will depend on the frequency and timing that URA will launch these four sites.
However, the particular site is a benefit of being connected to Marina South MRT Station, in contrast to all the four sites that aren’t located near the MRT station. Therefore, any the future developments at these four sites are more likely to be linked to the MRT station.
Additionally, URA just announced that an unnamed site that is called Marina Gardens Crescents GLS site located across the street from the site in question site will be opened for tender in June 2023. Due to their tender launches being separated by just six months, and their proximity to each other, developers for both sites could expect prospective purchasers and potential tenants to conduct comparison shopping.
Another site within the same vicinity the Marina View GLS site – granted the site to IOI Properties in September 2021 could be a competitor for tenants. Constructed condominiums within a radius of 1km from the site in question site might be a source of competition for tenants, too.
There is only one bid on the Marina View GLS site
Marina View site Marina View site is the final GLS site within the neighborhood which was granted. The site is located within a 2km distance from that of the Marina Gardens Lane site.
IOI Properties submitted the sole bid for the Marina View site and was granted the site in the form of at $1.508 billion ($1,379 per sq ft psf) in September 2021. The mixed-use site could provide 905 housing units as well as 540 hotel rooms with a maximum commercial space of 2,000 sq meters (21,528 square feet).
The low interest in Marina View GLS could be attributed to the lack of interest in Marina View GLS site could be due to its vast area and developers who have low risk appetite for hotels as a result of uncertainty about travel to and from the international tourist industry after the pandemic.
Certain developers might decide to wait to see the performance of sales for residences on at the Marina View site, before making a decision on whether they want to submit bids for GLS sites in the Marina South precinct. Additionally, there are several vacant plots which will be opened for tenders, meaning there’s less urgency for developers to take a quick decision.
The price of condos in the area is gaining momentum, but it’s not as condominiums
The closest completed condominium close to that of the Marina Gardens Lane site is Marina Bay Residences. The 99-year leasehold condominium is just 1km of GLS. GLS site. The condominium’s 428 units were granted a temporary occupation permits (TOP) in the year 2010.
Average resale cost of Marina Bay Residences declined by 9% from $2,542 psf in 2012 to $2,311 per square foot in 2022. The an average resale value in 99-year leasehold condos within District 1 increased by 6% in the same period, while the average the resale cost of 99-year leasehold condos across the island was up 36%. The average prices for resales in 99-year leasehold condominiums within District 1 and across the island are $1,060 per square foot and $2,060 per square foot, respectively.
Marina Bay Suites and Marina One Residences are leasehold 99-year condominiums situated within a two-kilometre distance from the site. Marina Bay Suites, which has 221 units along with 1,042 units of Marina One Residences obtained TOP in the years 2013 and 2017, respectively.
The average resales price for Marina Bay Suites dropped by 29% from $2,699 psf 2014 to $1,910 per square foot. However, the more recent Marina One Residences did better, with a modest rise in the amount of 8% from the average resale cost of $2,291 psf for 2019, to $2.477 psf.
The ideal location on Marina Gardens Lane, the prime location of Marina Gardens Lane site and URA’s impeccable record of success are both factors favorable to the site that could lead to homes located in Marina South trophy homes that are highly sought-after by wealthy.
But, buyers must to ignore the capital appreciation for the close-by Marina Bay Residences and Marina Bay Suites in addition as trust URA’s capacity to realize their vision regarding this area. Marina South precinct.
In particular, buyers need to believe that the amenities in the area will be improved sufficient under URA’s strategy in order to draw the attention of tenants and living-in families. In addition, buyers need to believe that this increased demand will add to resales prices and the capital appreciation of condos within the precinct.
The undeveloped state of this Marina South precinct is not anticipated to deter shrewd developers or buyers from taking a chance. Furthermore, URA’s impressive experience in developing long-term plans of development will be a great way to ensure developers as well as buyers this risk with Marina Gardens Lane GLS Marina Gardens Lane GLS site isn’t an unintentional leap of faith rather a simple leap.