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PROPERTY market watchers say a 1.36-hectare site for sale in Little India could eventually be home to another shopping centre - just metres from the tourist-friendly Mustafa Centre.

The Urban Redevelopment Authority (URA) said yesterday that the reserve list site, located at the junction of Race Course and Rangoon roads, is now open for application.

The 99-year leasehold parcel, directly above Farrer Park MRT station, has a gross plot ratio of 4.2, giving it a maximum gross floor area of 57,225 square metres. The maximum building height for part of the site is 20 stories, while the rest of the site can only go as high as six stories.

The site comes with a requirement that at least 40 per cent of floor area be used for a hotel. But it is zoned 'white', which means developers can use the other 60 per cent for residential, retail or other commercial purposes.

'The minimum quantum of hotel use will provide opportunities to meet the demand for hotel accommodation in this area,' said URA, pointing out that the area is highly popular with visitors.

Nicholas Mak, director of research and consultancy at Knight Frank, said: 'I think that the rest of the space is going to be a shopping centre. A new development could spring up in about three or four years.'

The site could attract bids in the range of $300-$340 million, Mr Mak said.

It does not have the frontage of the nearby Mustafa Centre, but if it were to become a retail centre it could be a serious competitor to the Little India mainstay, he said. A new mall could have the advantage of being directly linked to an MRT station.

However, Savills Singapore's director for marketing and business development Ku Swee Yong reckons that as much as 40 per cent of the space could be used for offices, and just 20 per cent for retail. In that case, he estimates that a winning bid could be $150-$180 million.

Because the site is situated close to Mustafa Centre, some speculate that Mustafa's owners could bid for it. Big property developers might also be interested, sources say.