Choice site to sustain building pace in Bay area

Published June 15, 2007

Choice site to sustain building pace in Bay area

By ARTHUR SIM


(SINGAPORE) A trophy site just off Shenton Way will be put on the Government Land Sales (GLS) programme for second-half 2007.

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The Marina View site will be the second on the GLS programme that defines a new corridor in the New Downtown, with an adjoining site launched in May.

Marina View, to be launched in July, could provide more than 900,000 square feet of commercial space. And the government wants it developed fast.

In a statement yesterday, the Ministry of National Development said: 'The release of the Marina View site via the confirmed list will maintain the momentum of building up Marina Bay and facilitate the seamless growth of the Central Business District into the Marina Bay area.'

While recognising the need to maintain momentum, it is interesting to note that more prime commercial sites are not on the list.

One reason could be that future demand is close to being met.

Jones Lang LaSalle regional director and head of investments Lui Seng Fatt believes that if and when all the key available commercial sites on the GLS programme are developed - about six sites including Marina View and another new site called Tampines Concourse - up to 2.5 million sq ft of office space could be in the pipeline in about three years.

'I think this supply is just right,' he said.

There is, of course, undersupply at the moment, but Mr Lui believes this can only be 'alleviated' by interim measures such as releasing unused state-owned buildings.

Savills Singapore director of marketing and business development Ku Swee Yong also believes the number of new prime sites being released is just right, saying: 'If you have too much construction in the Marina Bay and CBD area, it could be a strain on the infrastructure.'

With no fear of a flood of sites in the Marina Bay area, the Marina View site will be even more attractive to developers. Mr Ku believes amalgamating it with the adjoining site released earlier could prove to be even more profitable, as some common services could be shared. 'This type of prime site needs to be huge,' he said, adding that bids could be around $1,500 per sq ft per plot ratio.

Colliers International director for research and consultancy Tay Huey Ying also feels the current office space crunch cannot be alleviated by more land sales.

According to her, the situation is so severe that special measures may be needed to maintain Singapore's competitiveness. These could include temporary but more aggressive tax incentives or concessions to help businesses defray the rising cost of renting.