Staff Reporter
Published:
Image by Jason Goh from Pixabay
Analysts cited CBD sales risks, future housing supply over how quickly the Marina South precinct will mature.
Developers remain cautious about Marina South despite steady sales at its first private residential project, property analysts said after the latest Marina Gardens Lane government land sales site attracted only one bid.
EL Development submitted an offer of about $450.1m, equivalent to $1,243 psf per plot ratio, for the 0.6-hectare residential and commercial site.
The land rate was 11.3% below the $1,402 psf ppr paid for the neighboring site in 2023. That plot, which attracted four bids, is being developed as One Marina Gardens.
The latest site could yield approximately 390 private homes and 150 sq m of ground-floor commercial space. Its award remains pending.
CBRE Head of Research for Singapore and Southeast Asia Tricia Song said the below-expected bid reflected continued developer caution toward CBD sites.
She cited expectations of higher interest rates, weaker take-up at recent project launches and uncertain end-user demand. The 60% additional buyer’s stamp duty imposed on foreigners has also reduced foreign and investment purchases, increasing the sales risk for developers.
The lack of a primary school within 1km, limited nearby amenities and a smaller pool of upgrader buyers could also constrain demand, Song said.
Knight Frank Singapore Head of Research Leonard Tay said developers may prefer to conserve capital for established residential neighborhoods where demand from HDB upgraders and homeowners seeking smaller properties is more predictable.
Construction costs, the large future housing pipeline and uncertainty over the pace at which Marina South will mature also contributed to the subdued response.
Tay said the tender illustrated a distinction between developers’ confidence in Marina South’s long-term potential and the more conservative land prices they were currently prepared to accept.
PropNex Head of Research and Content Wong Siew Ying similarly said developers were taking a measured view of the precinct even though One Marina Gardens had recorded steady sales.
The project had sold about 672 of its 937 units, or 72%, at an average price of approximately $2,970 psf as of 4 October.
However, the opening of Marina South MRT station has been deferred until the surrounding area is further developed. Additional supply could also emerge from the nearby Marina Gardens Crescent reserve-list site, which could yield about 775 homes.
More than 10,000 private and public homes are planned in Marina South over the longer term.
Huttons Asia CEO Mark Yip said developers were becoming more selective and tightly managing liquidity amid geopolitical uncertainty, higher construction costs and interest-rate risks.
However, Huttons expects the site to be awarded because the $1,243 psf ppr offer is 26% above the $984 psf ppr bid for Marina Gardens Crescent that the government rejected in 2024 for being too low.
The lower land price could also provide EL Development with a buffer against higher development costs and market uncertainty.
Analysts said the site still offered several advantages, including proximity to the CBD, Marina Bay Financial Centre and Marina Bay Sands, as well as potential views of Gardens by the Bay and future access to Marina South MRT station.
Launch-price estimates varied. Knight Frank expects a future project to achieve an average price of between $2,700 and $2,900 psf, whilst CBRE forecasts $2,850 to $2,950 psf. PropNex expects the average price to exceed $2,900 psf.
Analysts expect developer confidence to improve as Marina South becomes more established and additional transport links, housing and amenities are completed.
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