New Reporter
13-02-24, 15:22
State land sale proceeds in FY2023 at S$8.15 billion so far, highest in 6 years
Feb 13, 2024
https://i.imgur.com/ygZOKyp.jpeg
PROCEEDS of state land sales have amounted to about S$8.15 billion so far for the government’s fiscal year ending Mar 31, 2024.
This is the largest sum recorded from government land sales (GLS) in the past six years, since FY2017, when S$8.4 billion worth of land was sold, said Chia Siew Chuin, JLL’s head of residential research.
The value of state land sold so far in FY2023 is up from the S$3.6 billion transacted in FY2022. It is also higher than the average seen annually between FY2017 and FY2021, which Minister for Law and Home Affairs K Shanmugam put at S$5.5 billion in a parliamentary reply in January 2023.
https://i.imgur.com/eY5GxDq.png
Land sold to developers includes plots for commercial, industrial, private residential and mixed-use zoning.
FY2023 saw significantly more sites tendered in the year. Some 17 plots have been awarded so far, up from the 12 sites sold in FY2022. Meanwhile, land prices have risen and are only now beginning to ease off.
A large site in Marina South saw only one bid at S$770.5 million (S$984 per square foot per plot ratio) when the tender closed on Jan 18. The offer came from a consortium comprising GuocoLand, Intrepid Investments and TID Residential. The Urban Redevelopment Authority rejected the bid as “too low”.
Bids for a prime site at Orchard Boulevard also came in at the low end of expectations when the tender closed on Feb 1. A UOL Group-Singapore Land joint venture placed the top bid of S$428.3 million (S$1,616.75 psf ppr) for the District 10 residential parcel. This was more than 30 per cent below the price of a Cuscaden Road state land lot sold in 2018.
A parcel for an executive condominium project in Tengah, meanwhile, garnered fewer than expected bids from developers, with the top bid of S$423.4 million (S$701 psf ppr) coming from Hoi Hup Realty and Sunway Developments.
The government has yet to announce if the latest February tenders will be awarded.
The government has been steadily increasing land supply for more private housing since 2020, saying it is committed to meeting demand and aims to “promote market stability and sustainability”.
Its land sales programme for the first half of 2024 is set to supply at least 5,450 private residential units, up from 5,160 in the H2 2023 schedule. Supply jumped from 3,505 units in H2 2022 and 2,785 units in H1 2022.
Leonard Tay, Knight Frank Singapore’s head of research, said: “Land prices on a per square foot basis generally rose for almost three years from the second half of 2020, only to begin levelling off in 2023.”
Wong Xian Yang, Cushman & Wakefield’s head of research for Singapore and South-east Asia, noted: “While residential land prices have come down in 2023, they remain significantly higher compared with pre-pandemic levels.”
The recent tenders for Marina South and Orchard Boulevard sites were conservatively valued by bidders. But sites tendered in 2023 in Toa Payoh and Clementi saw top bids exceeding expectations, said Tricia Song, CBRE’s head of research for Singapore and South-east Asia.
The Lorong 1 Toa Payoh site, the first residential GLS site in the area in eight years, was sold for S$968 million (S$1,360 psf ppr) last November, while the Clementi Avenue 1 parcel went for S$633.4 million (S$1,250 psf ppr).
Two large sites last year were awarded for over S$1 billion – a Tampines Avenue 11 mixed-use site and a Marina Gardens Lane site in the Marina South area.
https://i.imgur.com/OntqOLX.png
For the upcoming fiscal year, a tender closing in March 2024 for a massive 6.5 hectare white site in the Jurong Lake District will be keenly watched.
Some notable GLS sites which will close tenders between April and June 2024, and which will potentially be awarded in FY2024, include two plots in Upper Thomson Road and a large Zion Road parcel, said JLL’s Chia.
Lee Sze Teck, senior director of data analytics at Huttons Asia, estimates that sales proceeds from GLS sites could exceed S$15 billion in FY2024.
He said: “The Jurong Lake District tender could be more than S$5 billion. Huttons Data Analytics estimates that the rest of the land parcels under H1 2024 could be sold for S$8.6 billion to S$9.5 billion.”
Land values are expected to remain stable or fall slightly, market watchers said, but GLS proceeds are still expected to increase in FY2024.
Christine Sun, OrangeTee Group’s chief researcher and strategist, said: “Given the current economic and market conditions, developers are expected to proceed with caution and adopt a measured approach towards their land-banking activities.
“Some developers may also be more conservative in their expansion plans and focus on consolidating their existing portfolios. This could mean that while there may be some fluctuations in the short term, land-bidding activity may remain subdued and land bids may not increase significantly in the near future.”
Knight Frank’s Tay said: “Supply has largely caught up with current levels of demand, taking into account the existing cooling measures. Should the unsold stock of saleable units increase, land values could ease moderately in 2024.”
“Amid an abundance of land supply and options available, developers tend to be more selective and strategic, focusing their efforts on sites that offer more compelling or attractive prospects,” added JLL’s Chia.
“In these cases, the competition and land bids for such sites could still surpass expectations, resulting in stable or higher bid amounts.”
CBRE’s Song noted: “If prices are relatively stable, and there are more prime sites and more units buildable, we conclude the GLS value will probably go up.”
Proceeds from state land sales are not treated as government revenue, but go into Singapore’s reserves.
“When land is sold, no wealth is created,” Minister Shanmugam said in 2023. “The physical land, which is part of the reserves, is converted into money which goes into the reserves. The proceeds from the sale of state land thus go to the past reserves.”
Spending of the returns generated by reserves is done through the Net Investment Returns Contribution, which is a major contributor to the annual budget.
https://www.businesstimes.com.sg/property/state-land-sale-proceeds-fy2023-s815-billion-so-far-highest-6-years
Feb 13, 2024
https://i.imgur.com/ygZOKyp.jpeg
PROCEEDS of state land sales have amounted to about S$8.15 billion so far for the government’s fiscal year ending Mar 31, 2024.
This is the largest sum recorded from government land sales (GLS) in the past six years, since FY2017, when S$8.4 billion worth of land was sold, said Chia Siew Chuin, JLL’s head of residential research.
The value of state land sold so far in FY2023 is up from the S$3.6 billion transacted in FY2022. It is also higher than the average seen annually between FY2017 and FY2021, which Minister for Law and Home Affairs K Shanmugam put at S$5.5 billion in a parliamentary reply in January 2023.
https://i.imgur.com/eY5GxDq.png
Land sold to developers includes plots for commercial, industrial, private residential and mixed-use zoning.
FY2023 saw significantly more sites tendered in the year. Some 17 plots have been awarded so far, up from the 12 sites sold in FY2022. Meanwhile, land prices have risen and are only now beginning to ease off.
A large site in Marina South saw only one bid at S$770.5 million (S$984 per square foot per plot ratio) when the tender closed on Jan 18. The offer came from a consortium comprising GuocoLand, Intrepid Investments and TID Residential. The Urban Redevelopment Authority rejected the bid as “too low”.
Bids for a prime site at Orchard Boulevard also came in at the low end of expectations when the tender closed on Feb 1. A UOL Group-Singapore Land joint venture placed the top bid of S$428.3 million (S$1,616.75 psf ppr) for the District 10 residential parcel. This was more than 30 per cent below the price of a Cuscaden Road state land lot sold in 2018.
A parcel for an executive condominium project in Tengah, meanwhile, garnered fewer than expected bids from developers, with the top bid of S$423.4 million (S$701 psf ppr) coming from Hoi Hup Realty and Sunway Developments.
The government has yet to announce if the latest February tenders will be awarded.
The government has been steadily increasing land supply for more private housing since 2020, saying it is committed to meeting demand and aims to “promote market stability and sustainability”.
Its land sales programme for the first half of 2024 is set to supply at least 5,450 private residential units, up from 5,160 in the H2 2023 schedule. Supply jumped from 3,505 units in H2 2022 and 2,785 units in H1 2022.
Leonard Tay, Knight Frank Singapore’s head of research, said: “Land prices on a per square foot basis generally rose for almost three years from the second half of 2020, only to begin levelling off in 2023.”
Wong Xian Yang, Cushman & Wakefield’s head of research for Singapore and South-east Asia, noted: “While residential land prices have come down in 2023, they remain significantly higher compared with pre-pandemic levels.”
The recent tenders for Marina South and Orchard Boulevard sites were conservatively valued by bidders. But sites tendered in 2023 in Toa Payoh and Clementi saw top bids exceeding expectations, said Tricia Song, CBRE’s head of research for Singapore and South-east Asia.
The Lorong 1 Toa Payoh site, the first residential GLS site in the area in eight years, was sold for S$968 million (S$1,360 psf ppr) last November, while the Clementi Avenue 1 parcel went for S$633.4 million (S$1,250 psf ppr).
Two large sites last year were awarded for over S$1 billion – a Tampines Avenue 11 mixed-use site and a Marina Gardens Lane site in the Marina South area.
https://i.imgur.com/OntqOLX.png
For the upcoming fiscal year, a tender closing in March 2024 for a massive 6.5 hectare white site in the Jurong Lake District will be keenly watched.
Some notable GLS sites which will close tenders between April and June 2024, and which will potentially be awarded in FY2024, include two plots in Upper Thomson Road and a large Zion Road parcel, said JLL’s Chia.
Lee Sze Teck, senior director of data analytics at Huttons Asia, estimates that sales proceeds from GLS sites could exceed S$15 billion in FY2024.
He said: “The Jurong Lake District tender could be more than S$5 billion. Huttons Data Analytics estimates that the rest of the land parcels under H1 2024 could be sold for S$8.6 billion to S$9.5 billion.”
Land values are expected to remain stable or fall slightly, market watchers said, but GLS proceeds are still expected to increase in FY2024.
Christine Sun, OrangeTee Group’s chief researcher and strategist, said: “Given the current economic and market conditions, developers are expected to proceed with caution and adopt a measured approach towards their land-banking activities.
“Some developers may also be more conservative in their expansion plans and focus on consolidating their existing portfolios. This could mean that while there may be some fluctuations in the short term, land-bidding activity may remain subdued and land bids may not increase significantly in the near future.”
Knight Frank’s Tay said: “Supply has largely caught up with current levels of demand, taking into account the existing cooling measures. Should the unsold stock of saleable units increase, land values could ease moderately in 2024.”
“Amid an abundance of land supply and options available, developers tend to be more selective and strategic, focusing their efforts on sites that offer more compelling or attractive prospects,” added JLL’s Chia.
“In these cases, the competition and land bids for such sites could still surpass expectations, resulting in stable or higher bid amounts.”
CBRE’s Song noted: “If prices are relatively stable, and there are more prime sites and more units buildable, we conclude the GLS value will probably go up.”
Proceeds from state land sales are not treated as government revenue, but go into Singapore’s reserves.
“When land is sold, no wealth is created,” Minister Shanmugam said in 2023. “The physical land, which is part of the reserves, is converted into money which goes into the reserves. The proceeds from the sale of state land thus go to the past reserves.”
Spending of the returns generated by reserves is done through the Net Investment Returns Contribution, which is a major contributor to the annual budget.
https://www.businesstimes.com.sg/property/state-land-sale-proceeds-fy2023-s815-billion-so-far-highest-6-years