JTC Corporation on Wednesday launched a tender for a mega development site at Changi Business Park, and the 4.7-hectare site is likely to see bids as high as S$600 million.
The winning bidder will have to build an integrated development comprising a business park, retail activities and a hotel.
Changi Business Park has been a hub for businesses that need to stay close to the airport or away from the city centre. The new site being launched by JTC is at the junction of Changi South Avenues 1 and 2.
The site will yield a total gross floor area of 117,515 square metres, and 60 per cent of the floor space must be used for business park activities. The rest has been set aside for so-called "white" or commercial activities, including retail and hotel space.
Developers can dedicate 45 to 60 per cent within the "white" component to retail activities, with the remaining being set aside for the development of a hotel.
Observers say the winning bidder will need to build a hotel on the site to ease the crunch on hotel rooms in the vicinity.
Chua Yang Liang, head of research and consultancy at Jones Lang LaSalle, said: "I would say the retail component is going to be more limited to just serving the day-to-day needs of the immediate occupants there. Hotel, on the other hand, is probably more welcomed. There is a dearth of hotels in and around that area."
Some 2,000 hotel rooms could be built on the site, according to analysts that Channel NewsAsia spoke to.
The news comes as the government tries to cater to the rising demand for business park space and amenities in that area.
JTC expects Changi Business Park's current population of 6,000 to surge to 20,000 by 2011.
Market watchers say demand will continue to remain strong over the next 12 to 24 months.
Donald Han, managing director of Cushman & Wakefield, said as long as there is a huge gap between the prime office rentals in the central business district and the rentals in Changi Business Park, "there will be what we call the preference for huge multi-national corporations to try and average down CBD office rents by moving part of their operations into the Changi Business Park."
Interested bidders have up till 19 August to submit their proposals for the site. - CNA/ac
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