Ura Rejects Frasers Property Led Bid Media Circle Long Stay Serviced Apartment Site Citing Low Bid
[UPDATE]
The recent government land sale (GLS) site at Media Circle has seen the rejection of a bid worth $120.09 million by a consortium led by Frasers Property, alongside Padawan MC and Empire One North Property, according to a statement by the Urban Redevelopment Authority (URA).
The site, which spans over 62,046 sq ft, is the first fully-zoned GLS residential site for long-stay serviced apartments and the tender closed on September 19. However, the lone bid submitted by the Frasers Property-led consortium was not deemed satisfactory, with a land rate of $461 psf per plot ratio (ppr).
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In an announcement on Oct 3, URA stated that the bid was considered too low and thus, the tender was not awarded. It is the third residential GLS site that has been rejected by the government this year. The first was in February, when a bid worth $770.46 million ($984 psf ppr) by a consortium comprising GuocoLand, Hong Leong Holdings, and TID was rejected for a GLS site at Marina Gardens Crescent. The consortium was the only party to submit a bid for the 1.73-ha white site at Marina Gardens.
In September, the 6.5 ha master developer site at Jurong Lake District also failed to be awarded, despite receiving two bids from the same consortium consisting of CapitaLand, City Development, Frasers Property, Mitsubishi Estate Co, and Mitsui Fudosan.
Additionally, another residential GLS site along Upper Thomson Road, which included a long-stay serviced apartment component, did not attract any bids when the tender closed in June.
It is clear that the current market conditions have resulted in a cautious approach by developers in their bidding for GLS sites. The government’s decision to not award these sites indicates that there is still a gap between the bid prices and the government’s expectations. This comes amidst the release of the largest number of residential units since the first half of 2014, signaling the government’s efforts to address housing demand.