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The prime pieces of land Singapore will give a Malaysian-led consortium to resolve a long-standing dispute is worth up to S$7 billion (US$5.25 billion), a leading property analyst said.
The parcels, located around Singapore’s glamorous Marina Bay, were ceded in a land swap agreed Monday under which Malaysia will give up property it has owned inside Singapore as part of a railway dating back to British colonial rule over both countries.
Singapore offered 5.29 hectares (13.1 acres) of land in two plots, according to a fact sheet provided by the ministry of national development (MND).
A company known as M-S Pte. Ltd. will take ownership of the land for development, with 60% of the equity held by Malaysian investment agency Khazanah Nasional Berhad and 40% by Singapore’s Temasek Holdings.
The plots, loosely referred to as the “Marina South” and “Ophir-Rochor” parcels, were designated as “white” land use areas by the MND which means they could be used for high-value commercial, hotel or residential projects.
The Ophir-Rochor land parcels “can range anywhere from S$1.38 billion to S$1.9 billion” in the current property market, said Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants.
“The one at Marina (South) can range from S$3.5 billion to S$5 billion,” he told AFP.
Malaysia’s ownership of railway property that goes deep into Singapore territory had been an irritant for decades but both countries have vowed to resolve all outstanding issues and promote long-term cooperation.
One final detail remains – the issue of development charges on three of the six sections of land to be vacated by Malaysia.
A property analyst told AFP that a development charge is the tax payable when a site is turned into a more valuable project.
Both countries agreed that the issue is to be settled amicably through the Permanent Court of Arbitration based in The Hague.
“They have further agreed to accept the arbitration award as final and binding,” a joint statement by Singapore Prime Minister Lee Hsien Loong and Malaysian counterpart Najib Razak said.
In May, the two countries agreed that Malaysia’s state railway KTM will move its Singapore terminal to Woodlands, an industrial zone just across a narrow strait from Malaysia’s Johore state, by July 1, 2011.