<article><p>The first sale of land in Singapore’s Marina Bay in nine years is set to fetch a bumper price as developers jockey for a piece of the sought-after financial district.</p></article>

<p>The first sale of land in Singapore’s Marina Bay in nine years is set to fetch a bumper price as developers jockey for a piece of the sought-after financial district.</p>
<p>The 1.1 hectare (2.7 acre) plot may fetch more than S$1.8 billion ($1.3 billion), according to Cushman &amp; Wakefield Inc., or S$1,200 per square foot of gross floor area. That would make it the city’s most expensive land sale since 2007, when the Asia Square Tower I plot sold at S$2.02 billion, or a rate of S$1,409 per square foot.</p>
<p>“This will be a hotly contested plot,” said Christine Li, director of research at Cushman in Singapore. “Bidders could include sovereign wealth funds and aggressive bids from Chinese developers.”</p>
<p>The bidding interest comes amid a slew of 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.</p>
<h3>Reserve Bid</h3>
<p>An unidentified buyer has 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 on Aug. 30. The auction closes Nov. 8. The site can be developed primarily for office use, with a smaller area reserved for residential housing, a hotel or serviced apartments.</p>
<p>The plot is expected to command premium prices even though office rents have halved since the sale of the Asia Square Tower I land in 2007. That’s because there will be a dearth of new office openings from 2019 to 2021 &#8212; after a flood of supply coming up through 2018 &#8212; meaning the buyer of the plot will be poised to tap pent-up demand if the development is completed by early 2022, according to Hsueh Ling Ng, chief executive officer of Keppel REIT, Singapore’s second-largest office landlord and part owner of the Marina Bay Financial Centre.</p>
<p>The auction “will attract so many bidders,” Hsueh said. “Come 2019, 2020 and 2021 there will be zero office supply, and there has never been such a thing in Singapore’s history where there are three years of zero supply. That’s why the government has started this sale.”</p>
<p>Here’s a list of upcoming office supply through 2018:</p>
<p>Office Project Location Net Area (Square feet) Expected Completion Duo Bugis 570,000 Q3 2016 Guoco Tower Tanjong Pagar 890,000 Q3 2016 Marina One Marina Bay 1,876,000 Q4 2016 V on Shenton Robinson Road 278,000 Q2 2017 Frasers Tower Shenton Way 645,000 Q2 2018</p>
<p>Source: CBRE Group Inc.</p>
<h3>Bidding Partners</h3>
<p>The total cost of the Marina Bay land’s development may exceed S$2.5 billion, which will likely lead to the formation of bidding groups as small to mid-sized developers don’t have the financial muscle to undertake such a large project, Cushman’s Li said.</p>
<p>CapitaLand Ltd., Singapore’s largest developer, could partner with CapitaLand Commercial Trust and Mitsubishi Estate Asia Pte for a bid, she said.</p>
<p>Other potential bidders may include the consortium of Cheung Kong Holdings Ltd., Hongkong Land Holdings Ltd. and Keppel Land Ltd., which developed the Marina Bay Financial Centre after winning the previous auction in the area in 2007, Li said.</p>
<p>City Developments Ltd., Singapore’s second-largest developer, could also potentially bid given the project will have a residential or hotel component, which is that company’s strength, she said.</p>
<p><em>By Pooja Thakur</em></p>
<h4><em>Bloomberg</em></h4>


The first sale of land in Singapore’s Marina Bay in nine years is set to fetch a bumper price as developers jockey for a piece of the sought-after financial district.

Singapore sale of rare Marina Bay land set to fetch bumper price of $1.3b

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief

Singapore sale of rare Marina Bay land set to fetch bumper price of $1.3b

Start your deal-making journey now!

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief