GuocoLand bids $1.62 bn for Beach Road site

By
/ EdgeProp
|
September 28, 2017 11:14 PM SGT
The URA tender for the commercial site at Beach Road closed on Sept 28 with five bids received. The top bid came from GuocoLand, which submitted a bid of $1.62 billion ($1,706 psf per plot ratio).
The four other bidders for the Beach Road site were Chinese developer Kingsford Development ($1.57 billion, $1,636 psf ppr); companies linked to OUE Ltd ($1.45 billion, $1,526 psf ppr); Japura Development, a unit related to Hong Kong tycoon Li Ka-shing’s Cheung Kong Property Holdings ($1.4 billion, $1,477 psf ppr); and entities related to Far East Organization ($1.29 billion, $1,362 psf ppr).
Tay Huey Ying, JLL head of research & consultancy, was not surprised by the bids received for the 99-year leasehold site. “The aggressive bids are likely to have been fuelled by developers’ expectation of keen competition for the site given that optimism is riding high in the office investment sales market on the back of the nascent recovery in the leasing market,” she says.
The bullish bids submitted for the site also reflect developers’ confidence in the Beach Road-Ophir Road-Rochor area’s potential as an office cluster that will complement the existing financial district at Marina Bay and Raffles Place, says JLL’s Tay. It has become more developed with the completion of DUO by M+S and South Beach mixed-use developments with Grade-A office towers.

(Image source: URA)

“A possible reason for the bullish bid is that the developer may be of the opinion that when the new commercial building on this new site is completed in about 2022, the office leasing market could be in the middle of the recovery phase,” says Nicholas Mak, executive director of ZACD Group.
However, Christine Li, director of research at Cushman & Wakefield observes “a clear lack of participation” by major developers such as CapitaLand, Keppel Land and...