Nanshan said to be party that triggered tender for Central Boulevard site

20160819-bt-singapore-cbd-office-space-for-rent-nanshan-central-boulevard MARKET talk has it that it is Nanshan Group that has triggered the recent release of the Central Boulevard white site on the government reserve list.

The Chinese group, which entered the Singapore property market just a few years ago, is now said to be looking for partners to form a consortium to bid for the 1.1-hectare site next to Asia Square Tower 1 when it is launched for public tender.

Forming a consortium would enable the group to reduce risks and submit a more aggressive bid, boosting its chances of clinching the site, say observers.

To comprise mostly offices, the future project on the site is expected to have a potential gross development value of S$3.5 billion or more, said property consultants.

The Urban Redevelopment Authority (URA) said last Friday that it will launch the tender for the site this month; the tender is expected to close around 10 weeks later.

In announcing that the site had been triggered for launch, the URA - following its usual practice with reserve-list sites - did not identify the party that had successfully applied for the site's release.

However, it disclosed that the applicant has undertaken to bid at least S$1.536 billion, or S$1,010 per square foot per plot ratio for the site.

The URA's announcement sparked curiosity in property circles as to who might have made the application; a report in BT Weekend had suggested that the party was from mainland China.

Contacted on Thursday, URA's spokeswoman reiterated its practice of not identifying an applicant who has been successful in triggering a site on the government reserve list for launch. She added, however, that the successful applicant may team up with other parties to jointly submit a bid for the plot.

Based on market talk, Nanshan could potentially partner other Chinese property groups or even a group from Hong Kong.

Nanshan, headquartered in Longkou city in Shandong province, has so far been involved mostly in the residential, industrial and hotel segments of the Singapore property market; it has also invested in completed office space here. That said, the Central Boulevard site would be its first Singapore office development if it clinches the site at tender.

With prominent frontages along Central Boulevard and Raffles Quay, the 99-year leasehold island site can be built up to 50 storeys, with a maximum gross floor area (GFA) of 141,294 sq m (1.52 million sq ft); of that GFA, at least 100,000 sq m or 70.77 per cent must be put to office use.

In addition, up to 5,000 sq m in GFA can be given over to retail use. The development is to include a child care centre with a minimum GFA of 500 sq m.

The balance may be utilised for additional office, commercial school, hotel, serviced apartment or residential use.

Most consultants expect the winning bidder to develop an office, retail and residential project, with the presales of apartments generating cashflow that could help partially fund construction costs.

Nanshan Group's business in China spans industries as diverse as aluminium, aviation, finance, real estate, education, golf courses, tourism and wine. The group was founded by Song Zuowen, whose eldest son Song Jianbo and daughter-in-law Sui Yongqing run Nanshan Group Singapore.

In 2013, the group bought the Park Regis Singapore hotel along New Market Street/Merchant Road and the adjoining office block for around S$250 million. The following year, it bagged the former Midlink Plaza site along Middle Road for S$270 million on a turnkey basis, while it was being redeveloped into what is now the Mercure Singapore Bugis. Along the way, it picked up two freehold industrial properties near Tai Seng MRT station - the former Irving Industrial Building and Harper Kitchen; both sites are zoned for Business 1-white use.

Nanshan Group Singapore is also developing the Thomson Impressions condo on a 99-year leasehold plot in Lorong Puntong, which it clinched in a 2014 state tender.

This project is a joint development with Vico Construction, owned by Zuo Haibin, the former executive director of Qingjian International (South Pacific) Group, and his wife Li Ming Hua. The project management and development consultancy for Thomson Impressions is being handled by LSZ International, which is majority owned by Lee Chun Wye, who was formerly executive director at ZACD Investments.

CBRE Research's head of Singapore and South-east Asia Desmond Sim said that the news of Asia Square Tower 1's sale a few months ago to Qatar Investment Authority, followed by talk of a Chinese developer triggering the Central Boulevard plot next door, point to Marina Bay having been successfully marketed around the world as a premier international office location.

"When the development on the latest site is completed around 2021, it will be well timed to enjoy the full benefits of all the infrastructure being put in place in Marina Bay," he said.

Source: Business Times, 19 Aug 2016

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