(Feb 8): Singapore rejected a bid for a prime state land parcel for the first time in more than a decade, judging it to be too low.

The Urban Redevelopment Authority (URA) rejected the sole S$770 million (RM2.73 billion) bid from a consortium led by local developer GuocoLand Ltd, a statement showed Thursday. The offer had been “assessed to be too low”, the authority said.

The offer for the Marina Gardens Crescent site, which is located in the central business district near a major tourist attraction, was nearly 30% lower on a per-square-foot basis than another plot in the vicinity sold last year. It suggests developers are growing cautious about the outlook for the city’s property market, which has shown signs of cooling in recent months.

“That bid was a bit opportunistic and pessimistic thinking that prices will fall, but the government holds a different view that property values will be sustained or rise,” said Nicholas Mak, chief research officer at Mogul.sg, a property portal. “It’s the government indirectly signalling to the market not to try and lowball.”

The site will now be made available on a so called “Reserve List” allowing interested tenderers to submit bids with a minimum price that is acceptable to the government.

GuocoLand didn’t respond to an emailed request for comment.

Rejections of land bids in the city-state, while rare, are not unheard of. The last major rejection under Singapore’s Government Land Sales Programme, in which state land is released for development, was in 2011, when the URA nixed a joint offer from units of UOL Group Ltd and Singapore Land Group Ltd for a commercial parcel. More recently, authorities rejected a sole offer in 2020 for a site in the city’s north, although it was for the specific purpose of building a dementia care village.

Developers are expected to “remain cautious when it comes to land acquisition and bidding due to increased costs and risks associated with development”, said Chia Siew Chuin, head of residential research for Singapore at Jones Lang LaSalle Inc. “As a result, land bids should remain measured.”