The big Singapore land sale

Published June 15, 2007

The big Singapore land sale

Ministry doubles confirmed sites to 14 in second half 2007 and offers 27 plots in reserve list

By KALPANA RASHIWALA


(SINGAPORE) The government yesterday announced its biggest ever land sales programme in what is seen as a clear signal that it is serious about containing the rise in property prices and rents which could cripple Singapore's competitiveness.

http://www.businesstimes.com.sg/mnt/...15_06_2007.jpg

It is offering a total of 41 sites in the second half of this year - 14 through the confirmed list (double the seven in the H1 2007 programme) and 27 in the reserve list. The 14 confirmed sites is also the highest figure since the Ministry of National Development introduced the reserve list system in 2001.

MND has introduced 15 new sites, three of which are in the confirmed list, while the remaining 26 are being carried over from the current H1 2007 slate.

The confirmed sites for the second half include a site at Marina View - adjacent to an earlier plot released recently - and can yield about 900,000 sq ft gross floor area of commercial space.

Agreeing, Knight Frank managing director Tan Tiong Cheng said: 'Clearly, the message is to tell investors who may be concerned about rising office rents and home rentals in Singapore not to panic.'

A seasoned market watcher indicated there is also a message to developers, especially office landlords. There have been a lot of complaints from businesses about the doubling of office rents in the past 12 months.

Market watchers reckon the MND's strategy of jacking up the number of sites in the latest confirmed list - despite repeated pleas from developers not to do so - is to ensure greater certainty of supply. Whereas reserve list sites are released only on successful application by a developer, confirmed sites are launched according to a stated schedule.

'The economy is doing well, demand is there, so they must ensure there is sufficient supply,' as a market watcher noted.

Real Estate Developers Association of Singapore declined to comment yesterday evening.

Colliers International director (research and consultancy) Tay Huey Ying said: 'It's very clear. The government is pretty concerned about the supply crunch and has gone very aggressive on the confirmed list.'

The last time the MND offered 41 sites was the full-year 1997 programme, but it was stopped in its tracks due to the Asian financial crisis. In that year, the MND had planned to release sites for a total of 10,000 homes (7,000 private homes and 3,000 executive condos).

The 41 plots the government is offering for the second half can potentially yield 8,000 private homes, including 620 executive condos or ECs - a hybrid of private and public housing - 3.8 million sq ft gross floor area (GFA) of commercial space and 6,500 hotel rooms.

This compares with 5,475 private homes, 5.3 million sq ft of commercial GFA and 5,285 hotel rooms that could potentially be developed from the 32 reserve and seven confirmed sites in the current H1 2007 programme.

The H1 2007 programme has a higher supply of commercial space, boosted by MND pushing back the release of the former NCO Club site in Beach Road from H2 2006.

In its release yesterday, MND also highlighted additional sources of space the government will make available in H2 2007 - including around 1.4 million sq ft of space from vacant state buildings, small plots for office and other commercial uses and transitional offices, which will include a site at Newton MRT Station.

The MND said 6.9 million sq ft of office space will be completed by 2010, including the first phase of Marina Bay Financial Centre. On top of that about 2.7 million sq ft GFA of business park space mainly from Changi Business Park and Alexandra Distripark is scheduled for completion from H2 2007 to 2010. Such space is suitable for back-room operations and data centres of financial institutions, and SMEs.

For the private housing market, MND said about 42,200 new private homes are slated for completion from the second half to 2010. Of these, nearly 40 per cent of 16,400 units will be in the core central region. Property consultants read this statement as assuaging concerns about housing rents escalating, driving expats out of Singapore.

However, none of the 20 residential sites in the latest Government Land Sales programme, including eight confirmed plots, are in prime district locations.

'The collective sales market will take care of supply of land for the high-end market,' as Mr Tan observed. Instead, the GLS residential plots are in attractive suburban and city-fringe locations like Sembawang, Tanah Merah, Boon Lay, Bishan, Toa Payoh and Redhill, many of them very near MRT stations.

'This will be welcome relief for both home buyers and developers. Right now developers have to turn to the en bloc market even for sites in fringe locations. Now MND is offering a better selection of sites fo them,' said Mr Tan of Knight Frank. 'And it will bring relief to those who are looking for homes so they will not go into panic mode fearing a shortage of homes.'

Giving his perspective, a market watcher said: 'We have enough supply of high-end homes catering to well-heeled local and international investors. So the focus of the GLS programme must be to ensure sufficient supply of affordable private housing and ECs for younger Singaporeans and professionals.'

MND is offering a reserve site at Punggol Field for about 620 ECs after a three-year break, to 'ensure that ECs remain a viable housing option for those who aspire to private housing', it said.

The government has also added four new hotel sites - in Jalan Bukit Merah, Jalan Besar, Race Course Road and Tanjong Pagar - to provide a good variety of hotel accommodation for visitors.

Published June 15, 2007

Analysts eye govt land sales with interest

Sites include landed housing in small parcels, executive condominium, transitional offices

By ARTHUR SIM


(SINGAPORE) The latest Government Land Sales (GLS) programme could turn out to be the most interesting in years.

http://www.businesstimes.com.sg/mnt/...14_06_2007.jpg
"The bulk of the job creation in the future will be mid-to-low level, with many jobs filled by expatriates. They will need private housing in these mass market areas.'
- Savills' Ku Swee Yong

Barring a reserve list hotel site at the junction of Jalan Bukit Merah and Alexandra Road - which is slated for a 560-room hotel - the sites on the GLS are widely considered 'attractive' by property analysts.

Savills Singapore director of marketing and business development Ku Swee Yong says he is 'pleased' with the residential sites because he expects demand for new condominiums to be high.

The sites, located in areas like Alexandra Road and Tanah Merah Kechil, look destined for the upgrader and mid-tier market. And this is exactly where Mr Ku reckons the demand will be.

'The bulk of the job creation in the future will be mid-to-low level, with many jobs filled by expatriates,' he said. 'They will need private housing in these mass market areas.'

Offering something for everyone, the government has also put a landed housing site on the confirmed list. What is unusual about this site is that it is expected to be sold in small parcels - something not seen since 2001. 'This adds spice and excitement to the market and allows for creative developments,' Mr Ku said.

If there is another anomaly in the GLS list, it has to be the executive condominium (EC) site on Punggol Road. Many in the industry had thought ECs were slowly being phased out.

CBRE Research executive director Li Hiaw Ho said: 'It is likely that the government is offering an EC site in light of the escalating prices of private homes, to cater to the needs of the sandwich class.' The last EC site was offered in 2004, Mr Li pointed out.

The most interesting sites could be those that will be made available for the development of transitional offices.

Details of these sites are not available yet, but the Ministry of National Development says it is working closely with other agencies to coordinate the offerings.

So far, it has identified one suitable site near Newton MRT station. The development is expected to be about three to four storeys, and built in about a year at relatively low cost.

This may be an untested market, but Knight Frank director and head of research and consultancy Nicholas Mak believes even these sites will be popular.

'I have spoken to agents on the ground and they have said that companies are willing to consider such transitional office space,' he said.

'It will need to be cheap - and fast to build. It will also depend on the location. I think developers will be interested but it will have to come down to dollars and cents.'

One exclusion from the GLS list is prime residential sites, which could perhaps have helped cool the high-end market. But as with the prime commercial office sector, a delicate balance needs to be maintained.

'There will be quite a lot of supply in the high-end market with all the collective sales done. So why would the government want to add to that supply?' said Mr Mak.

http://www.businesstimes.com.sg/mnt/...15_06_2007.jpg

June 15, 2007

Govt releases 15 new sites for sale

They include land for apartments in suburbs, as well as for hotels and office space

By Joyce Teo, Property Correspondent


FIFTEEN new sites have been put up for sale under the Government's programme to offer land for development, in response to a robust economy and the red-hot property market.

The sites included land for apartments in suburbs such as Sembawang and Bishan, as well as office space and hotels to meet growing demand.

With yesterday's release, there are now 41 mainly residential sites on sale in the second half of this year - the largest number since 1997.

One of the new sites was for executive condos (EC). ECs were introduced in 1996, and the last one was sold in June 2004.

Analysts say the large offering of fresh plots is a sign of the authorities' bullishness in the economy and the Government's efforts to grow the population.

Sites put on the confirmed list - meaning they will be tendered out, regardless of whether developers have indicated interest - doubled to 14, of which eight are for homes.

'It reflects the confidence in the market and the need for space to cater to our growing population and economy,' said Savills Singapore director of marketing and business development Ku Swee Yong.

'It's a pretty balanced programme and a reflection that the Government is listening to the ground and addressing market concerns.'

The supply crunch in the booming office and residential sectors has given rise to concerns about higher living and business costs affecting Singapore's competitiveness.

'While releasing more land for commercial and residential development will not increase the supply of office and homes overnight, the perception that ample new supply is on the way will hopefully help to ease pressure on rents and prices,' said Ms Tay Huey Ying, director for research and consultancy at Colliers International.

The 20 residential sites, including eight new ones, could yield 8,000 homes.

The large number of residential sites is a response to the expected increase in mass market demand, said Knight Frank director of research and consultancy Nicholas Mak.

The Housing Board said the EC site would cater to those who aspire to buy private housing but may find it beyond their means.

Jones Lang LaSalle's head of research, Dr Chua Yang Liang, said the residential land release 'will pre-empt any run-up in mass market prices'.

The residential sites also include coveted suburban spots in Alexandra Road, Toa Payoh, Tanah Merah and Bishan, and should ensure there is affordable housing to cater to demand in the $500 to $550 per sq ft range, said Mr Ku.

Dr Chua lauded the Government's 'far-sighted' view in releasing just two commercial sites, so as not to flood the market in future, as it will take time to develop them.

Still, relief may be in sight for suffering office tenants, said the executive director of CBRE Research, Mr Li Hiaw Ho. In the medium term, about 1.5 million sq ft of offices could hit the market, plus transitional offices of about 1.3 million sq ft due as early as late 2008, he said.

Keen interest is expected in a Marina View 'white site', which allows offices, hotel rooms and other uses.

There are now 10 hotel sites on the list, which will yield the highest ever number of 6,500 rooms to cater to anticipated growth in tourist arrivals. One of the new sites is near Little India and another in Tanjong Pagar Road.

Overall, the list offers a wider variety of sites, consultants said. For instance, the landed Sembawang Park site will be subdivided into smaller plots for sale, enabling investors to buy and build their own house.

The Government also sells land on a reserve list where sites are tendered out only after developers show interest.

[email protected]



THE 15 new sites are:

Residential sites

# Sembawang Park

# Boon Lay Way/Yuan Ching Road

# Alexandra Road/Tiong Bahru Road

# Toa Payoh Lorong 2/3

# Yishun Avenue 1/2

# New Upper Changi Road/Tanah Merah Kechil Ave

# Bishan Street 14

# Punggol Field/Punggol Road (executive condo)

Hotel sites

# Jalan Bukit Merah/Alexandra Road

# Jalan Besar/Sturdee Road

# Race Course Road/Bukit Timah Road

# Bernam Street/Tanjong Pagar Road

Commercial sites

# Jalan Sultan

# Tampines Concourse

White site

# Marina View