A 99-year leasehold site has recently been introduced by URA along Marina Gardens Lane


Skywaters Residences condo floor plan

URA recently unveiled the 99-year leasehold site along Marina Gardens Lane to be offered for tender 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 to be put up to tender in the Marina South precinct.

It is the Marina Gardens Lane GLS site is zoned for residential use, and commercial space is located on the first floor. It could produce 790 residential units, and 775 sq meters (8,073 sq feet) in commercial spaces.

Skywaters Residences condo floor plan space translates from 678,000 sq ft up to 720,000 sq ft based on NLA, more than the existing 680,000 sq ft of Axa Tower, assuming the building has a building efficiency ratio (NLA to GFA) of about 80%-85%.

The prospect of paying more than a billion dollars to purchase the site which has no existing amenities like schools might be a risk for certain developers. However, this is offset due to the fact that this building could result in a brand new structure that is part of Singapore’s expanded city skyline.

It is stated in the URA tender documents stipulate that the development of Marina Gardens Lane Marina Gardens Lane site must be integrated into that of the Marina South MRT Station. Thus, future residents will greatly benefit from its accessibility to public transportation. Residents will also have the opportunity to take in breathtaking perspectives from the Straits of Singapore, the Marina Reservoir and Gardens by the Bay as the site has a view of both the water bodies as well as the garden display.

Most importantly More importantly, The Marina Gardens Lane site is located 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 bid. So, the winning bidder will have a first-mover advantage to help kick-start development in 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 situated next to that of the Marina Gardens Lane site. It is located next to the Marina Gardens Lane site. Marina Gardens Crescent site can be home to 775 residential units, and 6000 square meters (64,584 sq feet) that is commercial property.

Developers must be confident in the URA’s plan to develop The Marina South precinct will come to fruition, particularly since the development cost of Marina Gardens Lane Marina Gardens Lane site is anticipated to be high because of its size and central location. Developers should also consider the possibility that prospective buyers are open to looking beyond the undeveloped condition of the area and trust in the URA’s vision of the precinct.

Yet, URA and the Singapore government have a great track record of implementing the development plan as well as revolutionary 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 area 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 like 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 green and sustainable precinct that is pedestrian-friendly and has plenty of public spaces that are landscaped and cycling routes.

The area is also designed to be a neighbourhood of just 10 minutes in which residents can satisfy their needs every day by taking only a short stroll from their homes. Facilities will be located within mixed-use development and easily accessible through public spaces as well as major pathways for pedestrians.

Insufficient amenities in place In particular, schools.
It is believed that the Marina Gardens Lane GLS site is mostly surrounded by vacant space because it’s the first site to be offered to tender in the Marina South precinct. Except for Marina South MRT Station, there aren’t many facilities within a 1-km radius that are geared towards families.

There aren’t any supermarkets, food courts or shopping centres within walking distance. Additionally, there are there aren’t any schools within a 2km distance. However, the winner to purchase Marina Gardens Lane Marina Gardens Lane site must construct an early learning development center that is at least 500 sq m (5,382 sq feet). Gross floor space (GFA) for the childcare center cannot be included in the area of 750 square meters (8,073 sq feet) allowance to be used for commercial spaces.

Marina Bay Sands, Marina Bay Financial Centre and Gardens by the Bay are close neighbors. Marina Bay Residences which is just 1km away and is the closest condominium. Other condominiums within a 2km range are Marina Bay Suites, Marina One Residences, One Shenton, Robinson Suites, Lumiere and 76 Shenton.

The vacant parcels are likely to be launched gradually for tender in the context of the URA’s plans to develop the area. A white site located along Marina Gardens Crescent, which is adjacent to the site in question, site is scheduled to be opened to tender in June.

The latest rules on the size of units for Central Area
URA recently announced new regulations that be in line with its goal to achieve its goalof creating a active Central Area (which includes the Marina South precinct) by encouraging families to live in. According to the new regulations, the minimum requirement is 20% of the units within a new non-landed residential project within the Central Area must have net internal space that is 70 sq m or more (753 sq feet). It includes residential part of a mixed-use community. The new rules will go into effect on January 18 2023.

Downtown cores tend to draw investors over 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.

However, the new rules will limit the number of small apartments that developers can construct within this Marina Gardens Lane site. In this way, developers must ensure that the development that is planned for the site will also draw owner-occupiers. One of the factors that will help is URA’s main goal to create more families living within central areas. Central Area. This is why URA has implemented steps to facilitate the creation of mixed-use projects within the Central Area.

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 an maximum GFA of 68.573 sq meters (738,120 sq feet).

A huge site requires more money because of the higher cost of land and construction. This increases the risk of development for developers who could reduce the risk by looking for the possibility of a joint venture with a different developer or even a construction company. While joint ventures can reduce risk to development, they can create a range of issues and risk.

Market analysts have estimated that the top offer for the site to be between $1,360-$1,490 in plot proportions, which amounts into a land cost that ranges from $1.003 billion to $1.1 billion. Based on a price that is $1.05 billion and a profit percentage 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 specify that the layout of the development to be built must be examined through The Design Advisory Panel. In this way an iconic and exceptional design fitting for the prominent position is expected. This kind of design is likely to raise construction costs as well as complexity. This can raise the risk and cost of development.

Developers have to complete and sell the residential units of their development within five years of acquiring the land. If they fail to complete the task then they must pay an additional stamp duty for buyers in the amount of 35% on the land’s price. The site is expected to yield 790 residential units meaning that there will be a lot of pressure on the winner to complete the sale before the date.

The position in the famous Marina South precinct could make the housing units within the development’s upcoming the status symbols of the future development.

It is predicted that the competition will get hotter.
At present, there are four vacant sites in the vicinity of on the Marina Gardens Lane GLS site. The four parcels of land have similar plot-to-plot ratios of 5.6 as the main site as well as the same zoning scheme of residential with commercial on the first floor.

The winner of 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 timing and frequency at which URA will launch each of the 4 sites.

However, the particular site is a benefit of being part of Marina South MRT Station, in contrast to all the four sites that aren’t situated near one MRT station. So, the future developments at these four sites are more likely to be connected to one MRT station.

Additionally, URA just announced that an unnamed site located in the Marina Gardens Crescents GLS site located across the street from the site in question site will go on tender in June 2023. Because of their tender dates being separated by just six months and the proximity of their locations, 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 by IOI Properties in September 2021 could be a contender for tenants. The completion of condominiums within a radius of 1km from the site in question site could be a challenge for tenants as well.

There is only one bid to purchase 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 the site at $1.508 billion ($1,379 per sq ft psf) in September 2021. The mixed-use site will provide 905 housing units and 540 hotel rooms with a maximum commercial space of 2,000 square 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 explained by its huge space and developers have a low risk-aversion for hotels as a result of concerns about travel to and from the international tourist industry following the pandemic.

Certain developers might decide to sit and watch the performance of sales for homes on at the Marina View site, before making a decision about whether or not to tender for GLS sites in the Marina South precinct. Additionally, there are many vacant plots which will be opened for tenders, meaning there is less pressure for developers to take a quick decision.

A slow price increase for the nearby condominiums
The closest condominium that has been completed that is located near that of the Marina Gardens Lane site is Marina Bay Residences. The 99-year leasehold condominium is just 1km of Marina Bay Residences, which is located on the GLS site. The condominium’s 428 units were granted a temporary occupation permits (TOP) in 2010.

The average resale value in the case of Marina Bay Residences declined by 9% between $2,542 per square foot in 2012 to $2,311 per square foot in 2022. The an average resale value of 99-year leasehold condos within District 1 increased by 6% during the same period, while the average the resale cost of 99-year leasehold condos throughout the island was up 36%. The average prices for resales in 99-year leasehold condominiums within District 1 and across the island are $2,060 per sq ft and $1,401 per square foot, respectively.

Marina Bay Suites and Marina One Residences are leasehold 99-year condominiums that are located within a 2km radius 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 price for resales of Marina Bay Suites decreased by 29% from $2,699 psf 2014 to $1,910 per square foot. However, the more recent Marina One Residences did better, with an rise by 8% from the average resale cost of $2,291 per square foot in 2019. The current price is $2,477 per sq ft.

The location that is the most desirable on this Marina Gardens Lane site and URA’s stellar record of performance are advantages to the site that could lead to residences located in Marina South trophy homes that are highly sought-after by those with a high-end lifestyle.

However, buyers have to be willing to overlook the capital depreciation of the close-by Marina Bay Residences and Marina Bay Suites in addition as trust in URA’s capability to fulfill their goals regarding Marina South. Marina South precinct.

In particular, buyers need to be convinced that amenities within the neighborhood will increase sufficient under URA’s strategy and will attract buyers from both tenants and families. Furthermore, buyers have to believe that the increase in demand will provide a boost to the resale price and the capital appreciation of condos within the precinct.

The present state of development for Marina South’s Marina South precinct is not anticipated to deter shrewd developers as well as buyers who are willing to take a chance. Furthermore, URA’s impressive experience in developing long-term plans for development would be a great way to ensure developers or buyers this risk with Marina Gardens Lane GLS Marina Gardens Lane GLS site isn’t an unintentional leap of faith and is merely a leap.

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