The reserve price of a site serves only as a guide and is not necessarily a determinant on whether the government will award the site, said the Urban Redevelopment Authority (URA).
In fact, the planning authority has awarded sites for which the highest bid fell below the reserve price, it added.
The URA’s response came after a joint bid by UOL Group and Singapore Land for a Paya Lebar commercial site was rejected for being “too low” last week.
The consortium released a brief statement asking the authority to reveal the reserve price for future tenders “as much costs and efforts are put into submissions of such a scale.”
UOL and Singapore Land were the lone bidders, offering S$529.30 million for the site. It was 35 percent below a Low Keng Huat-led consortium’s bid for a site nearby that the URA awarded just six months ago.
The latest site, however, had certain technical challenges, including the hotel component that limited the number of bidders as well as the canal running through it.
The URA noted that it would not be “meaningful” to reveal the reserve price to “influence developers’ independent assessment and bid prices, which is dependent on many factors including their risk profile and their outlook of the market.”
“It would be more meaningful for the Government to make its own assessment of the developers’ independent bid prices, taking into consideration the reserve price, in deciding whether to award the land parcel,” a spokesman for the URA said.
He added that the reserve price system has performed well and has not prevented sites from being sold under the government land sales (GLS) programme.
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