6.8ha White Site To Position Jurong Lake District As Singapore’s 2nd CBD
SINGAPORE – A sale of the 6.8ha White Site in Jurong Lake District (JLD) under the just announced Government Land Sales (GLS) Programme for the first half of 2023 (H1 2023), will help position the area as the city-state’s biggest commercial hub outside of Singapore’s traditional central business district (CBD), according to a report from The Business Times that was updated on Friday morning (9 December, SGT).
However, there are reservations among some real estate experts regarding the volume of demand for office space within Jurong East MRT Station’s vicinity.
The White Site will be launched for tender in June 2023 and it will be sold to a master developer.
The huge tract of land, which will generate a development with a gross floor area (GFA) of up to 4.04 million sq ft, can be developed in stages in the next 5 to 10 years.
The Urban Redevelopment Authority (URA), which will be responsible for the tender exercise, is expected to offer a flexible payment scheme that would reduce the buyer’s upfront risk. This would permit the winning master developer to pay for the land in phases within a specified time frame according to a predetermined pricing formula.
“Pending more details on the site and purchase conditions, we believe the land cost could be at least S$1,300 psf per plot ratio (psf ppr). Due to the sheer size of the overall project, we expect developers to form consortiums or joint-ventures to tender for this site,” estimated CBRE’s Research Head for Southeast Asia, Tricia Song.
Assuming a tender period of 3 to 6 months, she estimated that the earliest office space could be completed in the 6.8ha White Site by 2028.
Meanwhile, Jones Lang LaSalle’s Research Head in Singapore Tay Huey Ying said the site could attract “fairly bullish bids” if Singapore’s economic situation improves by the middle of next year.
“The completion of the first phase of the development on the Jurong Lake District white site offering at least 70,000 sq m (753,474 sq ft) GFA of office space around the year 2027 will help to alleviate the tight supply of good-quality office space foreseen on the back of Singapore’s rising prominence and popularity as a global office hub,” she added.
Similarly, Edmund Tie’s Chief Executive Desmond Sim is also upbeat about the 6.8ha White Site in Jurong Lake District.
“I believe the notion of introducing this White Site in Jurong Lake District has been in the plans of URA for a while and it has garnered sufficient interest from developers for it to be placed in the confirmed list.”
“The site will also reinforce the plans behind a decentralised workforce and bring jobs closer to homes as more private residential population is expected stemming from the recent collective sale deals in the Jurong area,” he noted, adding that the massive site may help stabilise the pipeline of office supply in the next 10 years.
Meanwhile, the Reserve List site situated next to Punggol MRT Station that comes with a 30-year lease and will generate about 90,417 sq ft of office space may pique the interest of some property developers
“If anyone were to bid, it would likely be those developers that specialise on lands with short term leases – yield arbitragers who profit from the spread between the revenues collected and operating expenses,” commented Alan Cheong, Executive Director of Savills Singapore.
“There should be sufficient demand for offices in Punggol for a smallish office building. The quantum for office use is not imposing and should be easily absorbed by a variety of users, for example, insurance companies, co-working spaces and MNCs with industrial operations in the Seletar area.” But if borrowing costs remain high, the Reserve List site may not be triggered for sale.