URA launches two GLS sites at Media Circle: Commentary by ERA

SINGAPORE, 26 November 2024 – The tender for the Government Land Sale (GLS) sites at Media Circle A and B launched on 26th November 2024. The site can potentially yield about 325 and 500 units respectively. The tender for sale will close at 12 noon on 4 March 2025 and 29 April 2025.

Under developed Location for Residential Site

The Media Circle Parcels are located at the Southern end of the one-north area, surrounded by the Infocomm Technology and Media precinct of Mediapolis.

Located closer to the Science Park front, the sites are within four bus stops from the heart of the one-north district and one-north MRT station. The sites are accessible through major roads, such as AYE.

The Media Circle area was primarily developed as a business and tech park, with the addition of the residential component accommodating convenient commute in the area. As such, the immediate vicinity may not be sufficiently equipped with amenities to support a residential enclave.

Current housing options in the one-north area mostly revolve around co-living spaces, serviced apartments and hotels. More permanent choices are limited to landed homes in the Wessex precinct, and condominium options are mostly found at the Northern end of the agglomeration at the precinct of Vista.

Demand from Single Professionals and Investors Leveraging on Expat Rental Demand

Smaller units could interest investors given the scarce availability of residences in the Mediapolis area. Investors can tap into a tenant pool comprised of single professionals working in the one-north area who seek convenience in commuting.

With start-up, SMEs and high-value MNCs clusters in the area, investors could also leverage on the foreign professional population who rent properties in the area to avoid incurring the 60% ABSD.

Multitude of Risks Faced by Developers

The one-north and Science Park area currently has an outstanding stock of 118 units, and an estimated number of 355 unlaunched units from the previous Media Circle GLS. The inclusion of Parcel A and Parcel B will introduce 825 new units, bringing the new total to 1,762 since the launch of One North Eden in April 2021, causing a supply glut in the area.

Parcel B has a maximum GFA of 464,129 sq ft, marking it as the largest GLS site in the one-north area. On the other hand, Parcel A’s maximum GFA of 303,865 sq ft makes it the smallest of the three GLS sites at Media Circle. Based on project size alone, developers could be more inclined to choose Parcel A over B due to its more palatable size, reducing developmental risks with a lowered capital outlay.

However, attractive sites such as Bayshore and Chuan Grove are likely to remain closely watched by developers for the rest of the year. Smaller developers may not be able to maintain a competitive edge against larger developers and consortiums. Thus, Media Circle may present itself as an option to pursue.

The Media Circle sites are also less attractive than previous sites in the one-north area, which are located more conveniently to transportation and amenities. Blossoms by the Park is within a 5-minute walk to Buona Vista MRT Station and The Star Vista. The nearest amenities to Media Circle are within a 2km radius and require a longer commute time.

Thus, we expect to see muted bids to compensate for a multitude of risks from developing the residential site, especially since the site is within conventional housing estates and could see a smaller pool of buyers.

Furthermore, Media Circle (Parcel B) tender closes in the same month as Lentor Gardens. We can expect developers to gravitate towards the Lentor site. Lentor Gardens is the last planned GLS site for the area, resulting in a less competitive environment from neighbouring launches as new stock in Lentor depletes. As such, developers could pivot their bids to secure the more attractive site in Lentor instead.

Muted Response from Developers

With a smaller buyer pool than most residential sites to leverage on, developers may not be as keen to compete for the Media Circle sites. Thus, we can expect a lukewarm response of around two bids.

END OF PRESS RELEASE

For media enquiries, please contact:

Eugene Lim, Key Executive Officer, ERA Singapore

Email: [email protected]