More land bids. More developers paying above market values.
Developers are sharpening their acumen for land sales, residential and commercial, this year in particular. The prime 99-year leasehold Beach road commercial site which was triggered for sale had a top offer entered for $1.622 billion last week. The bid was lodged by GuocoLand units – GLL Prosper and GLL Thrive.
This top bid, thus far, is in addition to the other 4 offers which were already registered. All 5 bids are well above the trigger price. The lowest bid at $1.138 billion triggered the site for tender on July 6. The 950,593 sq ft gross floor area site was on the reserve list of the Government Land Sales programme. 70% of the site needs to be allocated for office use.
With the South Beach site going strong and Suntec offices nearby, how will this new development be received by investors and tenants?
The site sits on a sweet spot just at the outskirts of the Central Business District (CBD) but near enough Bugis, City Hall and Esplanade MRT stations. The former Beach Road Police Station stands on the site. The winning developer will need to plan fo conservation of the site plus build an underground walkway to Bugis MRT station.
Property analysts are expecting an eventual rental recovery in the office market. The expanding CBD will also extend into the Kallang River area, putting Beach road in a prime district.