The sales conditions for a white site at Central Boulevard in Marina Bay were released by the Urban Redevelopment Authority (URA) yesterday.
The 1.1 ha plot must have at least 100,000 sq m of the gross floor area (GFA) allocated for office use, while that for retail use will be capped at 5,000 sq m. The remaining GFA can be developed into residential, commercial - including retail - hotel, serviced apartments or additional office space.
A white site allows a range of uses, although the URA will very often stipulate a minimum component of a specific use to meet planning intentions.
The 99-year leasehold site with a gross plot ratio of 13.0 will yield a potential GFA of about 141,309 sq m, with up to 50 storeys or so.
The Central Boulevard site is in the heart of the new growth area at Marina Bay and is on the reserve list of the Government Land Sales Programme for this half of the year.
Given the impending supply of commercial space next year, the tender of the prime site would likely be triggered only towards the end of next year or early 2017, said analysts.
R'ST Research director Ong Kah Seng expects the tender to attract about five to eight bidders, with a top land bid of about $1,100 to $1,250 per sq ft per plot ratio.
Mr Ong said: "Office space rentals are under downward pressure and this is likely to dampen development interest for office space... Residential units can also be developed at the site, but this may not be an attractive option for developers since high-end residential property times in Singapore are deemed to be almost over."
SLP International executive director Nicholas Mak said: "From 2016 to 2019, about 10.7 million sq ft of office space could be completed and available for use... It would take the real estate market about seven to eight years to absorb this amount of space, assuming that the local economy is growing at a steady pace.
"In addition, the total development cost of this site, including the land cost, is expected to exceed $2.5 billion. The huge financial commitment required would result in even greater caution among developers."
Despite concerns about the impending supply next year, Mr Desmond Sim, CBRE research head for Singapore and South-east Asia, thinks the introduction of the site is much welcomed as it "provides continuity in terms of office supply to the market for the mid- to long term".
If the tender of the new site is triggered and awarded by the end of next year or early 2017, the new development should be completed only in early 2020 or 2021, and would help to arrest the possible supply shortfall after 2017, said Mr Sim.
At least one developer, Hongkong Land, has indicated interest. Executive director Robert Garman told The Straits Times that the firm is keen to expand its portfolio of prime-grade offices in Singapore.