Group pays $884m for rest of Marina plot

THE consortium that is developing the prime Marina Bay Financial Centre (MBFC) has disclosed the sum - $883.8 million - that it is paying for the second phase of the site, on nearby land.

And for the first time, the consortium, which includes Singapore's Keppel Land, disclosed that residential apartments, as well as offices, will be built in phase two.

The upmarket residential component of phase one of the 99-year leasehold site was a big hit among property investors.

The announcement comes amid tightening office supply, which is not expected to ease until MBFC's phase one is ready in 2010.

Office rents have climbed significantly in the past year and they look set to continue the climb. Indeed, prime rents may rise to as much as $20 per sq ft in two years, from the current high of about $13 psf, predicted property consultancy Savills Singapore's Mr Ku Swee Yong.

In a statement yesterday, the consortium said that it had exercised its option to buy phase two of the site in the new downtown from the Government. The price works out to about $423 psf, excluding 5 per cent GST (goods and services tax). In 2005, it took up an eight-year option for the buy.

Phase two will add 194,000 sq m of gross floor area to the 244,000 sq m of space that is being developed under phase one.

Assuming construction starts immediately, the new offices and homes may hit the market only by 2011, market watchers say.

'The consortium indicated it would develop both Grade-A office and high-end residential components in the new phase, details of which will be revealed in due course after discussions with the Urban Redevelopment Authority (URA),' the consortium said.

It comprises Keppel Land, and Hong Kong's Cheung Kong Holdings and Hongkong Land.

The general manager of the venture's asset management firm Raffles Quay Asset Management, Mr David Martin, said: 'The purchase of phase two demonstrates the consortium's confidence in Singapore's property market and its continued development as a key financial centre in Asia.'

Just last week, the Government said it plans to launch more development sites at Marina Bay.

For the consortium, its move is timely, coming less than a fortnight before the URA unveils its six-monthly review of development charges on March 1.

Given the rise in values in the area, property consultants expect significant increases in the commercial development charges for Marina Bay of up to 100 per cent.

The first phase of MBFC comprises two office towers and the 428-unit Marina Bay Residences, which sold out before its launch last December.

Phase two of the MBFC is made up of two separate sites - one is behind The Sail @ Marina Bay and the other is behind Marina Bay Residences.

joyceteo@sph.com.sg