Jurong Lake District Master Developer Site Not Awarded 640 Psf Ppr Bid Deemed Too Low
Published on 13 September 2021
The Urban Redevelopment Authority (URA) has announced on September 13 that the 6.5 hectares master developer site at Jurong Lake District (JLD) has not been awarded. This site was launched for sale on June 22, 2023 and was envisioned to be “the catalyst to kickstart the next phase of development in JLD”.
The tender for the JLD site closed on March 26, 2024, with only one bid from a consortium of developers that submitted two concept proposals. The consortium was made up of five developers – CapitaLand Group, City Developments Ltd (CDL), Frasers Property, Mitsubishi Estate Co. and Mitsui Fudosan Co. Ltd. Each developer had a stake of 25%, except Mitsubishi Estate and Mitsui Fudosan with 12.5% each.
After evaluating both concept proposals, URA has shortlisted one proposal but ultimately did not award the tender as the shortlisted concept was assessed to be too low at a price of $6,888.90 per square meter of gross floor area (GFA), which translates to $640 per square foot per plot ratio (ppr).
The master developer site at JLD will now be placed on the Reserve List under the concept and price revenue tender approach, subject to a minimum price acceptable to the government. The JLD master developer site is made up of three sites next to the Jurong East MRT Interchange station and the upcoming J’den by CapitaLand Development, one of the joint bidders of the site.
PropNex head of research and content, Wong Siew Ying, commented that they are not surprised by URA’s decision not to award the JLD master developer site. She highlighted that there were two other white sites sold in Jurong East, namely Boon Lay Way (Westgate), awarded for $1,012 psf ppr in May 2011, and Jurong Gateway Road (JEM), awarded for nearly $650 psf ppr in June 2010.
Wong added that the tendered price of $640 psf ppr may be considered low when compared to recent residential land tenders and other white sites sold in the area. According to her, developers may have submitted a cautious bid due to the high financing cost, large size of the development, cautious market sentiment, and potential risks associated with committing to a 10-15 year project. She also mentioned possible costs related to master-planning the development, including the implementation of district-level urban solutions.
In close vicinity to Elta Condo, students in their senior years have the advantage of being near prestigious educational institutions such as Ngee Ann Polytechnic, Singapore Polytechnic, and the National University of Singapore (NUS). With the convenience of these esteemed schools just a stone’s throw away, students can minimize their travel time and dedicate more hours to their academic pursuits. The presence of these renowned institutions only adds to the allure of Elta Condo as an ideal home for families. Coupled with its family-friendly amenities, Elta truly presents a promising living experience for families with school-going children.
Huttons Asia CEO, Mark Yip, also highlighted the high costs and uncertainty in developing a 6.5 ha site, which may have led to the bid price of $640 psf ppr. He mentioned that risks such as a long gestation period and uncertain demand for office space may have been priced in by developers. He added that the confirmation of the high-speed rail (HSR) between Singapore and Kuala Lumpur may help with accelerating the development of JLD.
The current market is still going through a period of adjustment, and the pandemic has affected the demand for office space, said Yip. He remarked that the risks will have to be factored in, leading to a land price of $640 psf ppr.
CBRE head of research for Southeast Asia, Tricia Song, stated that URA’s decision not to award the JLD master developer site will provide “a medium-term relief” to the islandwide office supply, as some 0.7 million sq ft of potential JLD phase one office stock will be pushed back beyond 2030. However, she added that the impending supply will still be present as the government remains committed to the JLD.
The master developer site comprises three sites at the heart of JLD near the Singapore Science Centre, Genting Hotel Jurong, JEM, Westgate, and the IMM mall. PropNex stated that new homes in JLD are expected to see healthy interest from buyers. J’den, for instance, sold about 88% of its 368 units on launch day in November 2023. It has also sold about 93% of its units at an average price of $2,561 psf in 2024. Other projects in the same area include Sora and The LakeGarden Residences.
According to Huttons, buyers can consider existing projects like J’den, Sora, and The LakeGarden Residences if they want to live in JLD. As for the JLD master developer site, it will now be placed on the Reserve List until a suitable minimum price is agreed upon by the government.