MARKET watchers were mostly surprised with the outcome of Tuesday’s tender closing for a white site along Marina View earmarked largely for private residences and hotel use.
The plot, which was triggered earlier from the government’s reserve, list drew just one bid at tender.
And the sole bid – S$1.508 billion or S$1,379 per square foot per plot ratio – from a wholly-owned unit of IOI Properties Group – was just S$101 more than the price at which the group successfully applied for the site to be released from the reserve list of the first-half 2021 Government Land Sales Programme.
Veteran developers and property consultants generally expect the 99-year leasehold plot to be awarded.
Explaining the lower-than-expected number of bids as well as bid price, the head honcho of a listed property and hotel group said: “There is generally low-risk appetite for hotel development as the hospitality sector is still affected by Covid and more so in Singapore where demand for hotel rooms is very much dependent on international travel, which has yet to resume in a significant way.”
In similar vein, JLL Asia-Pacific’s head of transaction advisory services for hotels and hospitality, Calvin Li, said: “The limited number of tenderers suggests that most investors continue to be cautious around the large minimum requirement for a hotel…”
source: The Business Times