The first land sold in Singapore’s Marina Bay in nine years fetched a record price for a government land sale, with a Malaysian-led group bidding S$2.6 billion (US$1.9 billion).
The price is equivalent to S$18,180 per square meter of gross floor area, topping the S$15,166 per square meter paid in 2007 for the Asia Square Tower 1 site, CBRE Group Inc said.
“The top bid is a very bullish call on the Singapore office market,” Singapore-based Cushman & Wakefield Inc director of research Christine Li (李敏雯) said. “All the bids are higher than the market expectations of between S$1.3 billion and S$1.8 billion, which is a reflection of the steady restoration of investors’ confidence in the office market.”
The winning bid came from Wealthy Link Pte, the Singaporean Urban Redevelopment Authority said in a statement.
Wealthy Link is owned by IOI Properties Group Bhd, part of a Malaysian conglomerate with interests in palm oil and property development, Cushman said.
The tender follows a slew of commercial property deals in the city.
The plot sits next to Asia Square, which Qatar’s sovereign wealth fund in June agreed to buy from BlackRock Inc for S$3.4 billion in Singapore’s biggest office transaction.
CapitaLand Commercial Trust, Singapore’s largest office real-estate investment trust, in May agreed to buy a 60 percent stake in CapitaGreen in the central business district for S$393 million, and MYP Ltd, which operates an investment holding company, offered S$560 million for the Straits Trading Building.
The top bid was 34 percent higher than the lowest bid, submitted by a consortium led by Overseas Union Enterprise Ltd. The price was probably buoyed by the stronger-than-expected preleasing commitment rates for new office developments, such as Guoco Tower and Marina One, Cushman said.
The Central Boulevard development is scheduled to be completed by 2021. That would benefit IOI Properties, as there will be a dearth of new office openings from 2019 to 2021 — after a flood of supply through 2018.
An unidentified buyer committed to bid the reserve price of S$1.54 billion, or S$10,872 per square meter of gross floor area, the authority said on Aug. 30.
The site can be developed primarily for office use, with a smaller area reserved for residential housing, a hotel or serviced apartments.
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