Jurong Lake District, a master-developer’s model?

Upon completion, this development could produce 1,700 residential units and 146,000 sq m (sqm) of office space. The development will include 73,000 square metres of space to be used by retail and food and beverages.

JLD is Singapore’s biggest business district outside of the central city. A master-developer strategy would be more effective for the government in achieving its goals of creating a second Central Business District. A single developer is given the freedom to design and build a development that is more seamless and integrated.

The master developer has the incentive to ensure the success of the integrated development, rather than have multiple developers compete for different sites. This may make it more difficult to find a development strategy and theme that works, or may lead to overlapping development. The JLD site white up for tender is made up of three adjacent lots of land that will be developed over multiple phases.

In the first phase the winning tenderer must build a minimum of 70,000 sqm of office, 51,000 sqm (about 600 units), of homes and 2,700 sqm for complementary purposes. A developer may decide to phase out the rest of the supply based on market demand. At the moment, state lands are sold generally on a plot by plot basis.

The master-developer model was also adopted for the 3.55 hectare Marina Bay Financial Centre, which had a total gross floor area of 438,000 square meters. It was built as an addition to the existing CBD in 2005.

The MBFC was developed by a group of Cheung Kong Asset Holdings and Hongkong Land, and Keppel. It was acquired for S$1.91 billion, or S$405 a square foot per plot rate (psf ppr). The commercial portion was completed over two phases.

CBRE data show that the mega development increased the office stock in the CBD Grade A stock by 43 per cent and the island-wide stock by 6 per cent as of end 2009.

Tricia Song, CBRE’s head of Singapore and South-east Asia research, explained that, although MBFC increased its stock in the CBD by a considerable amount, it wasn’t considered a “oversupply” as demand had also been increasing at this time. This was especially true for the financial sector which was booming during the period 2006-2008.

The MBFC Project added quality stock in the office segment and raised the overall prospects for market. Office rents increased by more than twofold as the CBD Grade A buildings’ vacancy rates dropped below 1% between Q3 2008 and Q2 2009.

The majority of the office space in Towers 1 and 2 had been pre-committed by the time they obtained their temporary occupation permit (TOP). Tower 3 had 70 per-cent occupancy at its temporary occupation permit in 2012, before reaching full occupancy the following years,” she said.

C&W estimates that the gross effective monthly rent for all three towers will be approximately S$13, up 24 per cent over S$10.50 at Q4 2015.

Suntec City and MBFC, as successful mega integrated projects have played a vital role in the development of Marina Centre into a thriving district.

These two projects were the catalysts for the transformation of the areas. “The impact of the two projects on rental and value prices extends well beyond their immediate surroundings.

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Impact of JLD

Prof Sing emphasized the similarity between the option system used for the MBFC land tender and the scheme used at the JLD. After the completion of Phase 1, the master developer may start Phase 2 development within a maximum of eight years. Option schemes also give developers land security. Developers must manage the timing of development carefully through the options. The feature of the option will also cap future land appreciation.

The downside is that large projects are more complex, and unexpected circumstances can delay construction and increase costs. As there may not be any other tenders in the JLD area in the near-term, the successful bidder could have a greater say in pricing. The development completed will contribute over 10 percent of the planned JLD office supply.

The 70,000 sqm of office space that is planned for phase 1 could translate into an estimated 640,000 net leasable square feet, and be completed in 2029.

We are confident about the demand for office space in JLD due to its planned transformation into a second CBD of Singapore. The new suburban Grade A offices such as Paya Lebar Quarter have also been well received.

It is expected that the number of bids will be relatively low, considering the risks and the scale of the JLD project.

If there are any bidders for this site, we anticipate that they will form joint ventures with one or two bids. The top bid may be S$1,000/sf/ppr, reflecting the higher risks associated with this project.

This rate is lower than CBRE’s initial forecast of S$1,300/sf/ppr in June 2023.

The mood has worsened in recent years, with increased headwinds on the macroeconomy. Construction costs are also higher and interest rates have been rising for longer, affecting financing costs.

If the JLD site development is done well, it could further enhance the value of the properties in the area.

J’den, a 368-unit project that was recently launched, sold 88 percent of its units at an average price S$2,451/sqft on the launch weekend. It is the most successful project in the midst of a weakened residential market.

This shows confidence for the location, even though there may be as many as 1,700 residential units in JLD within the next 15 year.

The Kampong Bugis project in Kallang is also in the pipeline. This 8.29 ha site, which was billed as the next waterfront precinct has been delayed because of delays in soil remediation.

On 410 ha of land, the JLD project will encompass the renovated Chinese and Japanese Gardens as well as the new Science Centre. The development will generate 100,000 new jobs, and 20,000 new housing units between 2040-2050.

Next Tuesday (March 26), the tender will close for a white 6.5 hectare site (ha) at Jurong Lake District. This site was first put up for auction in June of last year, under the Government Land Sales program using the master developer approach.


They could learn from past projects led by master-developers. The government has launched several large-scale integrated projects, and master developers are expected to design and develop them. Suntec City was built in 1988 to position Singapore as an international exhibition hub.

Suntec City, when completed, consisted of five towers with offices, a retail complex, an entertainment centre, and a convention center. It had a gross floor surface (GFA) totaling 339,000 square meters. Bids submitted for the JLD will be evaluated according to the concept-and price-revenue method, which requires bidders to submit concept proposals as well as tender prices separately.

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