The master developer in Jurong Lake District may reap rewards
It is hoped that the five giant property companies can begin work quickly and help JLD to succeed as the second CBD CapitaLand Development, City Developments Limited: C09 (CDL), Frasers Property: TQ5 (0%), Mitsubishi Estate, Mitsui Fudosan, and Mitsui Fudosan, Asia, are to be commended for their joint bids for Jurong Lake District. The bid for the JLD site that closed on Tuesday, March 26, was only contested by the consortium of Asian property giants.
Construction costs remain high and interest rates high. Currently, property cooling measures are in place for homebuyers. As businesses adopt hybrid office models, which include a combination of physical offices and remote work, the requirements for office space are also changing.
The global economy is also facing challenges due to rising geopolitical tensions. A property development project faces a high risk due to the background described above. Risks are greater for large-scale, long-term projects that aim to transform an area.
The risks are numerous for a developer who chooses to develop the JLD white 6.5 hectare site with a 99-year leasehold. It can result in a maximum gross floor area of 365,000 sq metres (sqm), or more than 3.9 millions square feet (sqft).
The site is primarily intended for residential and business use. Space can be allocated for retail, F&B (food and beverage), entertainment, hotel, sport and recreation, or community use. Minimum of 1.5 million sq ft for office space.
It is possible that the development of JLD’s master-developer website could take up to 10 years.
After much effort, the five-party group will probably be relieved when they find out that their bid was the only one. It may be a lengthy wait for the consortium to learn if its bid was successful.
Concept evaluation
For the JLD site, the Concept and price revenue tender approach will be used to evaluate all tenders.
A committee created by the Urban Redevelopment Authority is evaluating concept proposals based on their quality master plan and design concepts, quality public realm, sustainability, track record, and quality of public domain.
Only the most compelling concept ideas will be selected to move on to the next phase of evaluation. This stage will be based upon price.
Other state land auctions have evaluated concept proposals first. By using this approach, you can ensure that whatever is built at the JLD site will align with the authorities vision.
JLD is part of URA’s strategy for decentralisation. It will gradually be developed to be Singapore’s largest outside-the-city centre business district to accommodate diverse business requirements. JLD is to be a sustainability district that will achieve net-zero emission by 2045.
The master-developer method for JLD white sites can help a developer master plan an entire site, integrate different uses and coordinate implementation. It also allows them to adopt urban solutions at the district level.
When the master-developer method was used to award the tender for the Marina Bay Financial Centre, which was a planned extension of the Central Business District, the site was selected purely based upon price. The total GFA for the site in Marina Bay was 438,000 square meters.
Fast forward to today, the MBFC project has supported Singapore’s expansion as a global financial centre. It has also expanded the CBD area and greatly enhanced the city skyline.
Be flexible
The consortium partners that bid on the JLD site must have solid sustainability credentials and a track record of success in Singapore and/or abroad. Local parties CapitaLand CDL Frasers are the most well-established property groups in Singapore. They hold a combined 75% stake in the consortium.
We hope that one of the two concept proposals is accepted and JLD is awarded as soon as possible.
It is possible that some concept proposals may not make it through the evaluation stage. Also, it is possible that the bid price of the JLD site could be too low for government approval.
Is S$900 per plot per square foot, or S$3.5billion for the entire site, sufficient?
Consider exercising a great deal of flexibility in evaluating the concepts and, subsequently, in deciding if the bid price should be accepted.
Many developers in Singapore as well as elsewhere have no doubt looked at the JLD Master-Developer site since its tender was announced more than 9 months ago. The groups involved with the construction of MBFC, as well as many other top-tier development projects here, have shied away.
URA has the vision to make JLD Singapore’s second CBD. Transport infrastructure is provided by the government to help JLD grow.
Private property developers, however, are crucial to making JLD Singapore’s second CBD. The developers invest capital and manpower in building spaces that are hoped to attract users. A poor result can cause financial damage and also reputational damage.
If the developer is able to achieve a 90 per cent occupancy rate instead of an 80 per cent, the financial returns will be significantly affected.
Singapore’s second green CBD
JLD is near to Tuas Port and Jurong Innovation District. Two of Singapore’s leading universities are also nearby. But will they worry that JLD won’t be able to attract the human capital of the residents in the east?
To put it simply, the developer of this JLD site will have a difficult time making it work.
It is therefore a cause for celebration that a group of five major Asian property groups has entered the fray.
The JLD has the potential to be a model for sustainable districts and a showcase of how placemaking can create a live, learn, work and play precinct that is world class.
If JLD is chosen by local and foreign companies to be the second CBD, then the master developer at the JLD and Singapore will reap the rewards.
It is hoped that the five giant property companies can begin work quickly and help JLD to succeed as the second CBD
CapitaLand Development, City Developments Limited: C09 (CDL), Frasers Property: TQ5 (0%), Mitsubishi Estate, Mitsui Fudosan, and Mitsui Fudosan, Asia, are to be commended for their joint bids for Jurong Lake District.
The bid for the JLD site that closed on Tuesday, March 26, was only contested by the consortium of Asian property giants. Construction costs remain high and interest rates high. Currently, property cooling measures are in place for homebuyers. As businesses adopt hybrid office models, which include a combination of physical offices and remote work, the requirements for office space are also changing. The global economy is also facing challenges due to rising geopolitical tensions.
