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Thursday, March 28, 2024

Singapore Marina Bay land draws record price

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The first land sold in Singapore’s Marina Bay in nine years fetched a record price for a government land sale, with a Malaysian-led group bidding S$2.6 billion ($1.9 billion).

The price is equivalent to S$1,689 per square foot of gross floor area, topping the S$1,409 per square foot paid in 2007 for the Asia Square Tower 1 site, according to CBRE Group Inc.

“The top bid is a very bullish call on the Singapore office market,” said Christine Li, director of research at Cushman & Wakefield Inc. in Singapore. “All the bids are higher than the market expectations of between S$1.3 billion and S$1.8 billion, which is a reflection of the steady restoration of investors’ confidence in the office market.”

The Marina Bay Sands hotel and casino (center right) stands in Marina Bay near commercial buildings in the central business district (left) in this aerial photograph taken above Singapore on July 2, 2015. Bloomberg

The winning bid came from Wealthy Link Pte, which priced the 1.1 hectare (2.7 acre) plot at S$18,180 per square meter of gross floor area, Singapore’s Urban Redevelopment Authority said in a statement. Wealthy Link is owned by IOI Properties Group Bhd., part of a Malaysian conglomerate with interests in palm oil and property development, according to Cushman.

The tender follows a slew of commercial property deals in the city. The plot sits next to Asia Square, which Qatar’s sovereign wealth fund in June agreed to buy from BlackRock Inc. for S$3.4 billion in Singapore’s biggest office transaction. CapitaLand Commercial Trust, Singapore’s largest office REIT, in May agreed to buy a 60 percent stake in CapitaGreen in the central business district for S$393 million, and MYP Ltd., which operates an investment holding company, offered S$560 million for the Straits Trading Building.

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The top bid was 34 percent higher than the lowest bid, submitted by a consortium led by OUE Ltd. The price was probably buoyed by the stronger-than-expected pre-leasing commitment rates for new office developments such as Guoco Tower and Marina One, according to Cushman.

The Central Boulevard development is scheduled to be completed by 2021. That will benefit IOI Properties as there will be a dearth of new office openings from 2019 to 2021″•after a flood of supply through 2018.

An unidentified buyer committed to bid the reserve price of S$1.54 billion, or S$1,010 per square foot of gross floor area, the Urban Redevelopment Authority said Aug. 30. The site can be developed primarily for office use, with a smaller area reserved for residential housing, a hotel or serviced apartments.

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