A consortium of five real estate heavy hitters have jointly bid for the tender of a master developer site in Jurong Lake District, which is set to become Singapore’s largest business district outside the city centre.

The consortium comprising CapitaLand Development, City Developments (CDL), Frasers Property, Mitsubishi Estate and Mitsui Fudosan (Asia) submitted two bids with different concept proposals for the 6.5ha Government Land Sales white site – consisting of three plots – at the close of the tender on March 26.

CapitaLand Development, CDL and Frasers Property will each hold a 25 per cent stake in the consortium, while Mitsubishi Estate and Mitsui Fudosan (Asia) will each hold a 12.5 per cent stake.

Bids will be evaluated under the concept and price-revenue tender approach, which requires tenderers to submit concept proposals and tender prices separately.

Only shortlisted concept proposals will proceed to the second stage, which will be based on price alone.

PropNex research and content head Wong Siew Ying said the site could command a land price of $3.5 billion to $3.9 billion, assuming a top land rate of $900 to $1,000 per sq ft per plot ratio (psf ppr).

CBRE head of research for Singapore and South-east Asia Tricia Song sees the top bid at around $1,000 psf ppr, “before taking into account infrastructural and engineering costs to achieve various sustainability, net-zero emissions, car-lite, district cooling, (and) integration features, which will likely be quite substantial”.

JLL head of research and consultancy Tay Huey Ying said it is no surprise that the site attracted a consortium of developers with extensive experience in large-scale mixed-use projects, in view of the “substantial investment requirements, a long-term commitment potentially spanning 10 years or more, as well as the specialised and intricate nature of the project”.

Spanning 365,000 sq m, the site can yield about 1,700 residential units, 146,000 sq m of office space, and 73,000 sq m of gross floor area for complementary uses, such as shops, hotel, food and beverage, and entertainment businesses.

The proposed integrated development will be progressively completed over the next 10 to 15 years.

In the first phase, the master developer will be required to build at least 70,000 sq m gross floor area of office space, 600 private homes, an early childhood development centre, a supermarket and a foodcourt.

Ms Wong noted: “Going by our projected top bid range, the land cost for phase one is estimated at about $1.2 billion to $1.3 billion.”

The Urban Redevelopment Authority said the master developer approach – where one developer takes on all three plots – will allow for works to be done in phases and in tandem with market demand.

The appointed developer will plan the entire project, which includes providing the necessary infrastructure and connectivity between public spaces.

It will also have to plan a district cooling system and a pneumatic waste conveyance system.

CDL group chief executive officer Sherman Kwek said the group will draw on its “60 years of experience in shaping cityscapes and pioneering integrated mixed-use developments locally and overseas”.

With the Jurong Lake District slated to be a sustainable model district, ERA’s CEO Marcus Chu said he believes CDL, which “has a proven track record in driving sustainability, has a distinct advantage as master developer for the site”.

Mr Daijiro Eguchi, managing director of Mitsui Fudosan (Asia), said: “We view efforts towards decarbonisation as one of the most important issues, and are committed to addressing these social issues in JLD (Jurong Lake District) as well, in alignment with Singapore’s sustainability direction”.

Underscoring confidence in this location was the strong performance of J’den condominium in November 2023 amid weaker market conditions, analysts said.

The 368-unit project on the site of the former JCube mall in Jurong East was the top-performing new launch for 2023 after it sold 88 per cent at an average price of $2,451 psf over its launch weekend.

Mr Jonathan Yap, CEO of CapitaLand Development, said the group has “a long history and an extensive portfolio across asset classes in the Jurong area, with J’den as its latest addition”.

Given J’den’s success, Mr Mark Yip, Huttons Asia’s CEO, believes there could be more gross floor area allocated to residential use in phase one.

With no other private residential projects expected to launch in Jurong Lake District in the near term, there is likely pent-up demand for private homes at the site, said Mr Justin Quek, CEO of OrangeTee & Tie.

If sold, the white site, which links the existing commercial centre at Jurong East MRT interchange station and the future Jurong Lake District station of the Cross Island Line, will be the second master developer site to be developed in phases, following a 3.55ha site in the Marina Bay Financial Centre sold in 2005.

Credit: The Straits Times