The tender for the master developer site at Jurong Lake District (JLD) drew two bids when it closed at noon on March 26. Both bids were by a partnership of five of the biggest developers in Asia: CapitaLand Development, City Developments Ltd (CDL) C09 , Frasers Property TQ5 , and two of Japan's largest real estate developers listed on the Tokyo Stock Exchange, Mitsubishi Estate and Mitsui Fudosan.
The three Singapore partners — CapitaLand, CDL and Frasers Property — will each take a 25% stake in the consortium, while Mitsubishi Estate and Mitsui Fudosan will each hold a 12.5% stake. The URA tender is based on a two-stage evaluation based on concept and price.
The site at JLD is 6.5 ha across three land parcels and will have a projected maximum gross floor area (GFA) of 3.93 million sq ft. URA estimates that the combined sites can yield at least 1.57 million sq ft of office space, 1,700 residential units and an additional 785,765 sq ft of GFA that can be allocated for retail, hospitality, and communal spaces.
Given the scale of the development, it can be developed in phases. URA requires the first phase to have a minimum of 753,474 sq ft of office space and 600 residential units. According to URA, the winning consortium will have the flexibility to phase out the remaining supply according to market demand.
"The JLD white site is the largest tender ever called to date," says Lee Sze Teck, Huttons Asia's senior director of data analytics. "It is almost double the land size of Marina Bay Financial Centre and received two bids from the same consortium."
Given the strong response to J'den's project launch by CapitaLand last November, where 88% of 368 units were taken up on the first day of launch, Huttons' Lee expects the developers to allocate more GFA to residential use in the first phase.
The new development will be linked to the surrounding commercial buildings near Jurong East MRT Interchange Station, the epicentre of the future JLD.
Plot 1 is the nearest land parcel to the future high-speed rail (HSR) station, should it materialise. And if it does, there could be opportunities for developing serviced apartments to tap on demand for accommodation at a major transit node, adds Huttons' Lee.
Tay Huey Ying, JLL head of research and consultancy, expects the first phase of the office component to enter the market around 2028, coinciding with a peak in new supply over the next five years.
See also: Frasers Property: Narrowing the discount
Besides JLD, a further 2.35 million sq ft of new office space is set to be completed in 2028, with the majority of new supply concentrated in the Central areas such as Downtown and Orchard Road. Major projects contributing to this influx of supply include The Skywaters (0.7 million sq ft of office space) and the redeveloped Clifford Centre (0.35 million sq ft) in the CBD, as well as the redeveloped Comcentre (0.75 million sq ft) in Orchard.
"The first phase of the office component of JLD will have to be marketed at competitive rents owing to the intense competition among developers and landlords vying for tenants when it is marketed around 2028," notes Tay. "This, alongside the hefty infrastructure cost necessary to comply with the tender conditions, are amongst the key factors that could keep the land bid prices for JLD in check.
