Jurong Lake District Master Developer to reap huge rewards
Singapore’s green Second CBD
JLD’s location is convenient to Tuas Port Jurong Innovation District one-north, two of Singapore’s top universities and Jurong Innovation District. Will they be concerned that JLD will not allow them to access the talent of residents living in the east due to its location? The master developer will find it difficult to develop the JLD-white site.
This is why we should celebrate the fact that a team consisting of five Asian property companies has entered this race. In the end, it is possible that JLD could become a sustainable district model and a showcase to show how placemaking efforts can create precincts of international standard for people to live, work, learn and play.
Singapore and the JLD master developer could both reap great rewards if JLD’s success as the second central business district is due to it being the preferred choice of local and international companies in the new eco-economy. The risk of any property project is high in this context. Risiken projects are more likely to be large and have a long gestation time, especially if the project is intended to help transform a region.
Shortly, there are many risks for a builder who decides to take on the 6.5-hectare JLD site. The 99-year leasehold can provide a maximum Gross Floor Area (GFA) up to 365,000 square metres.
The site’s primary use will be for residential or office purposes. Retail, F&B, entertainment, hotel, sports and recreational, and community space can also be included. Over 1.5 million sq. ft. is required for office use. It’s possible to spend 10 years developing the JLD site. The five-party bid consortium will likely feel relieved after submitting its bid. The consortium may have to wait some time before they know whether their bid won.
Concept evaluation
The Concept and Pricing Revenue Tender Approach is used to evaluate the tender submissions on this JLD Site.
A committee, formed by the Urban Redevelopment Authority, will evaluate each concept proposal for its quality of masterplan and design concept. It will also assess their public realm quality and track records.
Only concept proposals with a strong appeal will be shortlisted for the next round of evaluation.
Yes, other state land procurements were conducted with concept proposals evaluated first. It is possible that such an approach will better ensure what is built at JLD aligns with authorities’ vision.
Five major property developers are hoping to get started soon so that JLD can become the second CBD.
CapitaLand Development, City Developments Limited, Frasers Property, TQ50%, Mitsubishi Estate, and Mitsui Fudosan Asia are to be commended on submitting two joint offers, each with its own concept proposal, for Jurong Lake District’s master-developer. The five Asian real estate giants were the only ones to bid in the tender of the JLD property, which ended on Tuesday (Mar. 26).
Interest rates and construction costs continue to rise. As of now, homebuyers must comply with strict property cooling regulations. In the meantime, office requirements are changing. Many businesses have adopted hybrid models that combine both physical office work and remote working. Add to that rising tensions geopolitical and a challenging economic outlook.
JLD’s development will be gradual as part URA’s Decentralisation Strategy. The district will cater to a wide range of business requirements. JLD is expected to become a sustainable model district by 2045, with all new developments contributing to achieving zero-emissions.
The master-developer-approach for the JLD-white site allows a builder to masterplan the entire site and integrate its various uses. They can also coordinate the development of the site, adopt district-level urban solution, and implement the master plan.
To this day, the Marina Bay Financial Centre’s (MBFC) tender, which would have been awarded based solely upon the site’s price, was still awarded using the master-developer model. This site is located in Marina Bay. Its total GFA was 438,000 sq.m.
Fast forwarding to the present day, the MBFC building has played a major role in supporting Singapore’s financial growth, expanded the CBD of the city and added a great deal to its skyline.
Be flexible
Consortium partners bidding for the JLD’s site are well-established in Singapore, or even overseas. They also have a strong sustainability record. CapitaLand CDL Frasers and other local property groups hold a combined 25% stake in the consortium.
The hope is to have one or two of the submitted concept proposals accepted and awarded a JLD site soon.
In fact, there is the risk that submitted concepts will not pass concept evaluation. The government might also not be satisfied with the bid price.
Would S$900/sqft per plot rate, which comes to S$3.5bn for the entire site be sufficient?
The concept proposals should be evaluated with great flexibility and the final decision on accepting the bid price made afterward.
Since it was put on the market for tenders more than nine month ago, there is no doubt that developers in Singapore and abroad have been looking at the JLD-master-developer site. The group that was involved in building the MBFC along with other top-tier developments has retreated.
URA, rightly, takes the initiative in seeing JLD as Singapore’s 2nd CBD. Transport infrastructure will be provided to JLD by the government in order to promote its growth.
Private developers play a crucial role in making JLD Singapore’s new CBD. They spend manpower and capital to build spaces they hope will attract users. In the event of a bad outcome, financial losses and reputational damage are likely.
Developers’ financial returns are greatly affected if office space on the JLD property is rented at S$8/sqft or S$10/sqft or if occupancy rates reach 90% instead of just 80%.
Singapore’s green Second CBD
JLD’s location is convenient to Tuas Port Jurong Innovation District one-north, two of Singapore’s top universities and Jurong Innovation District. Will they be concerned that JLD will not allow them to access the talent of residents living in the east due to its location?
The master developer will find it difficult to develop the JLD-white site.
This is why we should celebrate the fact that a team consisting of five Asian property companies has entered this race.
In the end, it is possible that JLD could become a sustainable district model and a showcase to show how placemaking efforts can create precincts of international standard for people to live, work, learn and play.
Singapore and the JLD master developer could both reap great rewards if JLD’s success as the second central business district is due to it being the preferred choice of local and international companies in the new eco-economy.
