New Reporter
02-04-24, 12:30
Rich rewards could lie ahead for Jurong Lake District’s master developer
The hope is that the consortium’s five property giants can start work soon and help JLD succeed as the second CBD
Mar 27, 2024
KUDOS to CapitaLand Development, City Developments Limited : C09 0% (CDL), Frasers Property : TQ5 0%, Mitsubishi Estate, and Mitsui Fudosan (Asia) for submitting two joint bids, with different concept proposals, for the master-developer site at Jurong Lake District (JLD).
The tender for the said JLD site which closed on Tuesday (Mar 26) drew no other contenders besides the consortium of the five Asian property giants.
Interest rates remain elevated and construction costs are high. As it stands, homebuyers are subject to tough property cooling measures.
Meanwhile, office space requirements are changing as many businesses adopt hybrid models that feature a mix of working from the physical office and remote working.
Add to that rising geopolitical tensions and a challenging global economic outlook.
Against the above backdrop, the risk in any property development project is high. And risks rise for a large-scale project with a long gestation period, especially one which is earmarked to help transform an area.
In short, risks abound for a developer that takes on the 6.5 hectare 99-year leasehold JLD white site, which can yield maximum gross floor area (GFA) of 365,000 square metres (sq m) or over 3.9 million square feet (sq ft).
The site will be largely for residential and office use. There can also be space for retail, F&B, entertainment, hotel, sports and recreation, and community uses. A minimum of over 1.5 million sq ft is for office use.
Development of the JLD master-developer site could easily span 10 years.
After putting much work into its bid submissions, the five-party consortium will likely be relieved to be the sole contender. However, the consortium may now need to endure a rather tedious wait to know if their bid prevailed.
Concept evaluation
The Concept and Price Revenue Tender approach is being used to evaluate the tender submissions for the said JLD site.
The concept proposals will first be evaluated for their quality of master plan and design concept, quality of public realm, sustainability and track record by a committee formed by the Urban Redevelopment Authority (URA).
Only compelling concept proposals will be shortlisted to proceed to the next stage of evaluation, which will be based on price.
Sure, there have been other state land tenders where concept proposals were evaluated first. Using such an approach may better ensure that what is built on the said JLD site aligns with the authorities’ vision for JLD.
As part of URA’s decentralisation strategy, JLD will be progressively developed into Singapore’s largest business district outside the city centre to cater to varied business needs. JLD is envisioned to be a model sustainability district with new developments to achieve net-zero emissions around 2045.
The master-developer approach for the JLD white site can allow a developer to comprehensively master plan the entire site to integrate the various uses, coordinate implementation of the development and adopt district-level urban solutions.
Still, when the master-developer approach was used for the Marina Bay Financial Centre (MBFC) site, which was to be developed as an extension to the existing Central Business District (CBD), the site’s tender was awarded purely on price. Total GFA for this site located in the Marina Bay area was 438,000 sq m.
Fast forward to the present, and the MBFC development has helped support Singapore’s growth as a financial centre, expanded the CBD and added much to the city skyline.
Be flexible
The consortium partners which bid for the JLD site have credible track records in Singapore and/or overseas and solid sustainability credentials. The local parties – CapitaLand, CDL and Frasers – which hold a combined 75 per cent stake in the consortium – are among Singapore’s most established property groups.
The hope is that one or both concept proposals submitted are deemed acceptable and the JLD site is awarded soon.
Indeed, the risk is that concept proposals submitted do not pass the concept evaluation hurdle. Also, the bid price for the said JLD site might be too low to be acceptable to the government.
Would S$900 per square foot per plot ratio which works out to over S$3.5 billion for the entire site suffice?
Perhaps great flexibility should be exercised in evaluating the concept proposals and subsequently in deciding whether to accept the bid price.
No doubt, many developers in Singapore and elsewhere have looked at the JLD master-developer site since it was put up for tender more than nine months ago. And groups linked with the building of MBFC as well as other top-tier developments here have shied away.
Rightly, the URA takes the lead in envisioning JLD as Singapore’s second CBD. To support JLD’s growth, the government provides the transport infrastructure.
Still, private property developers are critical in making JLD work as Singapore’s second CBD. They risk capital and devote manpower to build spaces that hopefully entice users. Get a poor outcome and there is financial pain as well as reputational damage.
Whether the office space at the JLD site achieves monthly rent of S$8 per square foot (psf) or S$10 psf or hits 90 per cent instead of 80 per cent occupancy will greatly impact a developer’s financial returns.
Singapore’s green second CBD
JLD is close to Tuas Port, Jurong Innovation District, one-north and two of Singapore’s top universities. However, will companies worry that by being at JLD, they cannot draw human capital from the many residents who live in the east?
Put simply, making the development of the said JLD white site work is challenging to whoever is its master developer.
Thus, we should cheer that a team of five leading Asian property groups have put their hat into the ring.
After all, what is truly exciting is that the JLD could be a model sustainable district and a showcase on how place-making efforts can create a world-class live, work, play and learn precinct.
Rich rewards could lie ahead for the JLD site’s master developer and Singapore if JLD succeeds as the second CBD by being the prime choice for local and foreign businesses playing in the new green economy.
https://www.businesstimes.com.sg/opinion-features/rich-rewards-could-lie-ahead-jurong-lake-district-s-master-developer
The hope is that the consortium’s five property giants can start work soon and help JLD succeed as the second CBD
Mar 27, 2024
KUDOS to CapitaLand Development, City Developments Limited : C09 0% (CDL), Frasers Property : TQ5 0%, Mitsubishi Estate, and Mitsui Fudosan (Asia) for submitting two joint bids, with different concept proposals, for the master-developer site at Jurong Lake District (JLD).
The tender for the said JLD site which closed on Tuesday (Mar 26) drew no other contenders besides the consortium of the five Asian property giants.
Interest rates remain elevated and construction costs are high. As it stands, homebuyers are subject to tough property cooling measures.
Meanwhile, office space requirements are changing as many businesses adopt hybrid models that feature a mix of working from the physical office and remote working.
Add to that rising geopolitical tensions and a challenging global economic outlook.
Against the above backdrop, the risk in any property development project is high. And risks rise for a large-scale project with a long gestation period, especially one which is earmarked to help transform an area.
In short, risks abound for a developer that takes on the 6.5 hectare 99-year leasehold JLD white site, which can yield maximum gross floor area (GFA) of 365,000 square metres (sq m) or over 3.9 million square feet (sq ft).
The site will be largely for residential and office use. There can also be space for retail, F&B, entertainment, hotel, sports and recreation, and community uses. A minimum of over 1.5 million sq ft is for office use.
Development of the JLD master-developer site could easily span 10 years.
After putting much work into its bid submissions, the five-party consortium will likely be relieved to be the sole contender. However, the consortium may now need to endure a rather tedious wait to know if their bid prevailed.
Concept evaluation
The Concept and Price Revenue Tender approach is being used to evaluate the tender submissions for the said JLD site.
The concept proposals will first be evaluated for their quality of master plan and design concept, quality of public realm, sustainability and track record by a committee formed by the Urban Redevelopment Authority (URA).
Only compelling concept proposals will be shortlisted to proceed to the next stage of evaluation, which will be based on price.
Sure, there have been other state land tenders where concept proposals were evaluated first. Using such an approach may better ensure that what is built on the said JLD site aligns with the authorities’ vision for JLD.
As part of URA’s decentralisation strategy, JLD will be progressively developed into Singapore’s largest business district outside the city centre to cater to varied business needs. JLD is envisioned to be a model sustainability district with new developments to achieve net-zero emissions around 2045.
The master-developer approach for the JLD white site can allow a developer to comprehensively master plan the entire site to integrate the various uses, coordinate implementation of the development and adopt district-level urban solutions.
Still, when the master-developer approach was used for the Marina Bay Financial Centre (MBFC) site, which was to be developed as an extension to the existing Central Business District (CBD), the site’s tender was awarded purely on price. Total GFA for this site located in the Marina Bay area was 438,000 sq m.
Fast forward to the present, and the MBFC development has helped support Singapore’s growth as a financial centre, expanded the CBD and added much to the city skyline.
Be flexible
The consortium partners which bid for the JLD site have credible track records in Singapore and/or overseas and solid sustainability credentials. The local parties – CapitaLand, CDL and Frasers – which hold a combined 75 per cent stake in the consortium – are among Singapore’s most established property groups.
The hope is that one or both concept proposals submitted are deemed acceptable and the JLD site is awarded soon.
Indeed, the risk is that concept proposals submitted do not pass the concept evaluation hurdle. Also, the bid price for the said JLD site might be too low to be acceptable to the government.
Would S$900 per square foot per plot ratio which works out to over S$3.5 billion for the entire site suffice?
Perhaps great flexibility should be exercised in evaluating the concept proposals and subsequently in deciding whether to accept the bid price.
No doubt, many developers in Singapore and elsewhere have looked at the JLD master-developer site since it was put up for tender more than nine months ago. And groups linked with the building of MBFC as well as other top-tier developments here have shied away.
Rightly, the URA takes the lead in envisioning JLD as Singapore’s second CBD. To support JLD’s growth, the government provides the transport infrastructure.
Still, private property developers are critical in making JLD work as Singapore’s second CBD. They risk capital and devote manpower to build spaces that hopefully entice users. Get a poor outcome and there is financial pain as well as reputational damage.
Whether the office space at the JLD site achieves monthly rent of S$8 per square foot (psf) or S$10 psf or hits 90 per cent instead of 80 per cent occupancy will greatly impact a developer’s financial returns.
Singapore’s green second CBD
JLD is close to Tuas Port, Jurong Innovation District, one-north and two of Singapore’s top universities. However, will companies worry that by being at JLD, they cannot draw human capital from the many residents who live in the east?
Put simply, making the development of the said JLD white site work is challenging to whoever is its master developer.
Thus, we should cheer that a team of five leading Asian property groups have put their hat into the ring.
After all, what is truly exciting is that the JLD could be a model sustainable district and a showcase on how place-making efforts can create a world-class live, work, play and learn precinct.
Rich rewards could lie ahead for the JLD site’s master developer and Singapore if JLD succeeds as the second CBD by being the prime choice for local and foreign businesses playing in the new green economy.
https://www.businesstimes.com.sg/opinion-features/rich-rewards-could-lie-ahead-jurong-lake-district-s-master-developer