Jurong Lake District master developer to reap the rewards
Be flexible
The consortium members who bid on JLD have proven track records both in Singapore and/or internationally, as well as solid sustainability credentials. The consortium partners – CapitaLand CDL Frasers – which holds a combined stake of 75 percent – are Singapore’s leading property groups. One or both of these concept proposals are likely to be accepted, and the JLD will be awarded shortly. There is a risk that concepts submitted will not pass the concept assessment hurdle. The government may not accept the bid for the JLD. Does S$900 a square foot per plot, which is S$3.5Billion for the whole site?
You should exercise a lot of flexibility when evaluating concepts proposals and deciding whether you accept the bid. The JLD master-developer’s site has been on the radar of many developers in Singapore, and around the world, since it was put to tender over nine months ago. Groups linked to the building of MBFC or other top-tier projects in Singapore have shied from this site.
URA leads the charge in establishing JLD as Singapore’s second CBD. To help JLD develop, the government has provided the necessary transport infrastructure.
Private property developers remain crucial to the success of JLD as Singapore’s 2nd CBD. They invest money and time to create spaces which will hopefully attract customers. Poor results can lead to financial loss and damage to reputation.
A developer taking on the JLD-white site of 6.5 ha, 99 year leasehold, can expect to have a maximum floor area (GFA), which is 365,000 square metres or over 3.9m sq ft.
The site will be used for residential use and offices. Also, there can be room for retailing, F&B services, entertainment, hotels and sports and recreation. The minimum office area is 1.5 million square feet. The JLD master developer site development could easily last 10 years.
After spending a great deal of time and effort preparing its bid submissions the five-party coalition will be relieved if they are the sole competitor. However, it may take a while for the five-party consortium to discover if their bid has been successful.
Concept evaluation
To evaluate tender submissions at the JLD, we are using the Concept-and-Price Revenue Tender approach. The Urban Redevelopment Authority’s (URA) committee will assess the concept proposals first for their quality in terms of master plans and design concepts, as well as public realm and sustainability. Only those concept proposals that are compelling will make it to the second stage of evaluation.
It’s true that in other state land bids, concept proposals have been evaluated first. Such an approach can help to ensure that any building on the JLD property is in line with the authority’s vision. The five property giants of the consortium hope to begin their work as soon as possible and assist JLD in becoming the second CBD.
CapitaLand Development, City Developments Limited C09 0%(CDL), Frasers Property TQ50%, Mitsubishi Estate, and Mitsui Fudosan Asia for submitting two bids, each with a different concept, for the Jurong Lake District Master-Developer Site (JLD).
The five Asian property titans consortium was the sole bidder for the JLD Site tender that closed Tuesday (Mar 26).
The cost of construction and interest rates continue to be high. In the current situation, homebuyers will be subjected to strict property cooling.
The office space needs are changing, as businesses move to hybrid models which feature both working from the office and working remotely.
Add to these rising geopolitical conflicts and the challenging outlook for global economics.
Any property development project will be high-risk in the face of this backdrop. A large-scale development project, with its long gestation period and the intention to transform an entire area is more risky.
JLD will gradually develop into Singapore’s most important business district, outside the city’s centre. This is to cater for a variety of business needs. JLD’s new developments are aimed at achieving net-zero carbon emissions by the year 2045.
The master developer approach can be used for JLD’s white site. This allows a developer to plan out the entire site in order to integrate all uses, coordinate the implementation and adopt district level urban solutions.
When the master developer approach was used in the Marina Bay Financial Centre project (MBFC), it was awarded purely based solely on the bid price. This site was located in Marina Bay and had a GFA total of 438,000 square metres.
Fast-forward to today. The MBFC’s development has helped to support Singapore as a growing financial centre. In addition, the CBD was expanded and much of the city skyline has been added.
It will have a significant impact on a developer’s return if the JLD site is rented out at S$8/sqft (psf), S$10/sqft, or 90 instead of only 80 percent.
Singapores green second CBD
JLD has a great location near Tuas Port. Jurong Innovation District is just one-north of JLD, and there are two top universities in Singapore. Companies may worry about not being able to recruit talent from residents of the east if they are located at JLD.
Simply put, it is difficult for the developer to make this JLD White Site work.
So, it is a good thing that five Asian real estate groups have entered the fray.
It is exciting to think that the JLD can be a model district for sustainability and showcase how place-making initiatives can create world-class precincts where people live, play, and learn.
Master developer for JLD could reap huge rewards, as well as Singapore itself, if JLD proves to be the next CBD. This would mean that local and overseas businesses will choose JLD over other options in the new green economic system.
