Land in Singapore’s Marina Bay is on sale for the first time in nine years, and could attract what Bloomberg is calling "a bumper price" as developers look to build in the in-demand financial district.
The 2.7-acre plot could fetch more than S$1.8 billion ($1.3 billion), according to Cushman & Wakefield, making it the city’s most expensive land sale since 2007, when the Asia Square Tower I plot sold at S$2.02 billion.
An unidentified buyer has reportedly committed to bid the reserve price of S$1.54 billion, according to the Urban Redevelopment Authority. The site can be developed primarily for office use, but a smaller area has been reserved for hotel use, residential housing or serviced apartments.
“This will be a hotly contested plot,” Christine Li, director of research at Cushman in Singapore, told Bloomberg. “Bidders could include sovereign wealth funds and aggressive bids from Chinese developers.” The total cost of the Marina Bay land’s development may exceed S$2.5 billion, which Li said would likely lead to the formation of bidding groups, since smaller developers could not afford to undertake such a large project independently.
So who are the likely bidders? Li suggested some likely businesses who would want this parcel of land.
- CapitaLand Ltd., Singapore’s largest developer, could partner with CapitaLand Commercial Trust and Mitsubishi Estate Asia Pte for a bid.
- The consortium of Cheung Kong Holdings Ltd., Hongkong Land Holdings Ltd. and Keppel Land Ltd., which developed the Marina Bay Financial Centre after winning the previous auction in the area in 2007.
- City Developments Ltd., Singapore’s second-largest developer, could also potentially bid given the project will have a residential or hotel component, which is that company’s strength.