Jurong Lake revamp on the cards, but is the price right?

Source : Today - 29 Nov 2008

SINCE it first unveiled ambitious plans in April to transform sleepy Jurong over the next decade, the :Urban Redevelopment Authority (URA) has rolled out the area’s first land parcel: A site for mixed development in the Jurong Lake District.

The 1.9-hectare site, located beside the Jurong East train station, has a 99-year leasehold and a maximum gross floor area of about 1.15 million square feet (107,000 square metres).

At least 30 per cent of the area must be designated for office use, while the rest can be used for office, commercial, or residential purposes.

“The proposed development of this site will act as a catalyst to kick-start the growth of the Jurong Lake district into a vibrant, attractive commercial lifestyle hub of the western part of Singapore,” the URA said on Friday.

The site is on the reserve list, meaning it will be open for tender only ifdevelopers indicate a minimum bid price that is acceptable to the Government.

Property analysts praised the site for its location, but said that land parcels right now might not draw keen interest, given the weak market conditions.

:Chesterton Suntec International research head Colin Tan said some developers might find it a “waste of time” to prepare bids, as the URA has recently found price indications for at least three earlier tenders too low.

“Given the official view that the Singapore will be in a ‘long and deep’ recession, I feel that the URA should expect bids that reflect the economic realities of the time and be prepared to accept quite low bids,” said Mr Tan.

But DTZ’s regional head of research Ong Choon Fah said the reserve price - determined by the Chief Valuer - must be “reasonable” in land-scarce Singapore.

Developers “with foresight” may jump in to buy the Jurong Lake site at prices that are “not heavily competed”, said Knight Frank’s deputy-managing director Danny Yeo. Those with strong financial positions could even join forces, he added.

The successful buyer will work with a URA-chaired panel to design the development, which must be completed within 8-and-a-half years upon tender.