Expect a tight competition for Beach Road site

Bidders from the Central Boulevard site could jump at this opportunity.

The land parcel at Beach Road is expected to generate interest from developers in the office sectors.

According to Tricia Song, Colliers International head of research for Singapore, the triggering of the tender launch for the Beach Road site is quite timely, given the completion of this site would likely be 2022 or after, when there is limited prime office supply.

"In view of the robust investment sales in Singapore prime office buildings sustained since Q2 2016 (such as Asia Square Tower 1, Straits Trading Building, Capital Square, PWC Building, GSH Plaza), and the pick-up in economic activity since Q4 2016, it wasn’t a surprise that the site has been triggered. One of the largest office schemes Marina One (East Tower) also received its TOP in June," she explained.

She added, "Given the brighter economic prospects, local developers who want to increase their office exposure, and foreign developers who are keen to gain a meaningful foothold in Singapore investment properties."

Meanwhile, JLL national director for research and consultancy Ong Teck Hui said the triggering of the site comes with the positive investment sentiments in the office property market and also at a time when office rents appear to be firming after two years of decline.

"Seven bidders contested keenly for the Central Boulevard site in November 2016 and it would not be surprising if the unsuccessful parties in that tender contest again, for the subject site. If residential use is incorporated in the development, it would coincide with an expected upturn in the residential market," Ong said.

He believes that the development of the subject site augurs well for the office market as it will increase the supply of quality office space in the CBD fringe that is more affordable than those in prime CBD.

"In the CBD, the potential supply of office space is approximately 18% of its investment grade stock while in the CBD fringe, it is less than 2%, reflecting the uneven spread of new supply between the two sub-markets," he explained.