URA has rejected the $120.09 million bid submitted by a consortium led by Singapore-listed property group Frasers Property, with Padawan MC and Empire One North Property, for the 62,046 sq ft government land sale (GLS) site at Media Circle.

The Media Circle site is the first GLS residential site released for sale that is fully zoned for long-stay serviced apartments (SA2), and the tender closed on September 19. The Frasers Property-led consortium submitted the sole bid of $120.09 million or a land rate of $461 psf per plot ratio (ppr).

On Oct 3, URA announced that the tender was not awarded as the bid was deemed to be "too low".

A Frasers Property spokesperson says the developer "acknowledges" URA's decision on the bid for the site at Media Circle. "Our proposal was based on our assessment of the 60-year tenure for this pure SA2 site, which is a new housing typology with a minimum stay duration of three months, compared to the current minimum of seven days for our existing serviced apartments," adds the spokesperson. "We remain interested in investing in this new asset class and will continue to explore future opportunities as they arise.”

Read also: Frasers Property-led JV bids $461 psf ppr for Media Circle long-stay serviced apartments site

Another residential GLS site along Upper Thomson Road with an SA2 component drew no bids when the tender closed in June.

"Of the three GLS sites with SA2 component, only the site at Zion Road (Parcel A) was awarded," says Mark Yip, CEO of Huttons Asia. "This could be due to the attractive location which balances the risks of building SA2. The Government may want to revisit the concept of SA2. Should SA2 be offered under the GLS programme? Should the tenure be shorter? Should there be a mix of normal service apartments and SA2 to balance out the risks?"

The Media Circle site is the third GLS site the government has not awarded this year, citing that the bids received were "too low". In February, the government rejected a $770.46 million bid ($984 psf ppr) submitted on Jan 18 by a consortium comprising GuocoLand, Hong Leong Holdings, and TID (a joint venture between Hong Leong Holdings and Japanese developer Mitsui Fudosan) for a GLS site at Marina Gardens Crescent. The GuocoLand-led consortium was the only party to submit a bid for the 1.73-ha white site at Marina Gardens.

In September, the 6.5 ha master developer site at Jurong Lake District was not awarded despite two bids from the same consortium comprising CapitaLand, City Developments Ltd, Frasers Property, Mitsubishi Estate Co, and Mitsui Fudosan. The consortium had submitted a bid of $644 psf ppr for the site.