Singapore Rejects Bid for Business District Over Low Price

(Bloomberg) -- Singapore rejected a bid by a group of top property firms to develop a new business district in the island’s west, after judging the price offered by it to be unattractive.

The Urban Redevelopment Authority rebuffed the S$6,889 ($5,309) a-square-meter gross-floor-area price offered by the consortium to develop a 6.5 hectare site in the Jurong Lake District as it was “assessed to be too low,” according to a statement on Friday. The offer was shortlisted from two proposals submitted by the same group of developers.

The consortium included CapitaLand Group, owned by Singapore state investor Temasek Holdings, and the island’s largest listed developer City Developments Ltd. Others involved were Frasers Property Ltd., Japan’s Mitsubishi Estate Co. and Mitsui Fudosan Co.

The move is a setback to efforts by the city-state to decongest its Central Business District, where office vacancies remain tight. But many of the top financial and technological firms that have flocked to the financial hub have shunned locations outside prestigious skyscrapers in the city, opting instead to downsize offices or locate their staff overseas.

At the same time, developers are starting to pull back from taking major risks or pricey bids as the country’s heated residential market cools. Another bid for a prime land site near the city center was already rejected in February, while a housing site failed to attract any interest from developers for the first time in more than two decades in June.

The consortium suggested that a rebid is unlikely, with its spokesperson saying in a statement that the developers “look forward to future partnership opportunities.”

The URA, in its statement Friday, said the government remains committed to developing the site, which was envisioned to include business, residential and recreational space, and will continue to engage with industry stakeholders. The land parcel will be placed on a so-called Reserve List allowing interested tenderers to trigger another launch if it meets a minimum price that is acceptable to authorities.

(Updates with consortium’s reaction in the sixth paragraph.)

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