Total land sales revenue drops 41% to S$7.3b in FY2008-2009

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Total land sales revenue drops 41% to S$7.3b in FY2008-2009

By Yasmine Yahya/ Wong Siew Ying, Channel NewsAsia | Posted: 08 October 2009 1446 hrs


SINGAPORE: Revenue from government land sales fell 41 per cent to S$7.3 billion in the last fiscal year ended March 2009.

But analysts said despite the decline for the full year, land prices have actually risen 30 per cent in the past six months and there are some concerns that this could lead to another property bubble.

Showflats have been packing in the crowds for many months now. Demand for land has also picked up, with more plots released for tender since April this year.

Analysts expect demand for land to grow in 2010 on the back of more positive market sentiment and developers looking to beef up their land bank.

In the first quarter next year, observers said the government could release more strategic sites at Jurong Lake District, Kallang Waterfront and Rochor/Ophir Road.

And when the government brings back the Confirmed List of sites in the first half of next year, more land will be on the market.

According to market watchers, the net effect is that revenues from such sales are likely to stay around S$7 billion in the current fiscal year to March 2010, similar to last year. Observers said increasing land prices will also boost revenues.

Recently, a residential site at Serangoon Avenue 3 was sold for S$221 million.

Donald Han, managing director, Cushman & Wakefield, said: "I was a bit surprised at the bidding for Serangoon. I think the top bid was 10 to 11 per cent higher than the second bidder.

"One would expect more cautious bidding in view of the current market and stock market conditions have started to come down. But I think by and large, it is a vouch of confidence in the Singapore residential market."

Some analysts said more measures may be needed to rein in the property market.

Colin Tan, director, Head of Research & Consultancy, Chesterton Suntec International, said: "I think the set of measures they announced recently were to curb speculation but this excess liquidity is not speculation. It is investment, so this is lots of money trying to find a more productive use. So maybe a different set of measures may need to combat this excess liquidity."

Observers said the situation should also be closely watched to ensure excess supply does not build up. - CNA/vm

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Published October 9, 2009

Fatter year ahead after blip in govt land sales

Analysts expect higher sales proceeds for current financial year as activity in property market picks up

By UMA SHANKARI AND TEH SHI NING


(SINGAPORE) The government collected $7.3 billion from sales of state land in the year ended March 2009, $5.1 billion lower than the record $12.4 billion raked in the year before.

The figures were released yesterday in the Singapore Land Authority's latest annual report.

Analysts expect to see higher sales proceeds for the current financial year compared to the last as activity in the property market picks up. But proceeds are not expected to hit the record $12.4 billion collected in FY07/08 during the property boom.

'There is a good chance that we can surpass the numbers seen during the last financial year,' said Colliers International's director Tay Huey Ying, citing the increased demand for government land in recent months.

Chesterton Suntec International's research and consultancy director Colin Tan said that with improved sentiment and with developers now 'hungry for land', land sales revenue should rise this year as more sites are sold at higher prices.

Last year, the fall in overall sales revenue was due to lower proceeds from sites sold to the private sector. This fell to $4.7 billion in FY08/09 from $10.4 billion the year before. Land sold to the public sector rose slightly to $2.6 billion, from $2 billion in FY07/08.

The largest deal of the year was the sale of Atrium@Orchard, a Grade A office building, to CapitaMall Trust, which netted the state $840 million.

Other large sales of government land sites to the private sector included the land parcels for the condominium projects Trevista and The Peak at Toa Payoh, and Mi Casa at Choa Chu Kang.

SLA's chairman and chief executive said in their joint message that 'the slowdown in business was particularly felt in the second half of the financial year'.

Hence, while demand for state land and properties was relatively strong in the first half of the financial year, SLA's focus in the next six months was on 'facilitating the land needs for infrastructural developments, and implementing the government's economic relief measures for business'.

The agency's operating income fell 8 per cent to $92.5 million, from $100.9 million a year ago.

SLA said that the utilisation rate of state land rose to 79 per cent, from the previous year's 77.8 per cent. But occupancy rate for state properties was 86 per cent, one percentage point down from a year ago. SLA managed an estimated total gross floor area of 4.03 million square metres of state properties as of March 31, 2009.

The agency also reported that fewer instruments and caveats were lodged for HDB and private property transactions. Only 342,624 registrations were recorded in FY08/09, down from 537,629 the previous year.

Looking ahead, analysts said demand for residential land sites is expected to be strong. The last four tenders for government residential land sites drew 12 to 15 bids each.

The latest, a 99-year- leasehold land parcel in Serangoon Avenue 3 for which the tender closed on Wednesday, received 15 bids. The highest bid was $221.2 million or $529 per square foot of gross floor area.

Colliers' database, which tracks only sales of land plots (which would exclude the sale of the Atrium@Orchard building, for example) showed that $1.5 billion of government land sales were seen from April 2008 to March 2009.

However, from April 2009 to yesterday, sales of government land have already hit $1 billion, said Ms Tay. She therefore expects state proceeds in this financial year to exceed last year's.

In addition to residential land, demand is also expected to be healthy for small hotel sites and industrial plots. However, the commercial market is expected to see little to no interest, Ms Tay said.

To cope with the demand, Mr Tan suggested that more agencies release sites simultaneously.

'When demand builds up, as is the case now, it would be good to have more than one agency selling sites, to ensure sufficient supply to release the pressure from demand,' he said.

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October 9, 2009 Friday

Govt sold less land last year

By Joyce Teo, Property Correspondent


THE Government sold less land last year as the property market cooled and the financial crisis took hold but there are better expectations for the upcoming 12 months.

The Singapore Land Authority (SLA) raked in $7.3 billion in sales for the 12 months to March 31, down from the previous year's tally of $12.4 billion but up on the $6.2 billion collected two years ago.

The manager of state land and buildings said its revenue fell 8 per cent from $100.9 million in 2008 to $92.5 million.

'The current economic condition has adversely affected the property market segment, resulting in a significant drop in land sales agency service, titles registration and land information businesses,' said the SLA report out yesterday.

Apart from directly managing about 14,000ha of state land and about 5,000 state buildings, the SLA is also the national land registration authority for property transactions.

As in the 2008 financial year, most of its sales proceeds came from the private sector - $4.7 billion - while public sector sales contributed $2.6 billion.

A year ago, it collected a hefty $10.4 billion from the private sector but just $2 billion from the public.

The largest deal it made in the year to March 31 was the $840 million sale of Atrium@Orchard, a Grade A office building above Dhoby Ghaut MRT station.

Sales of land to the private sector made by other government agencies included plots for the new condominium projects The Peak and Trevista in Toa Payoh and Mi Casa at Choa Chu Kang Drive. But all these sales failed to live up to the levels seen in the 2008 financial year when the market was smoking hot.

The huge deals done then included the $2.02 billion sale of a plum site at Marina View and the $1.69 billion deal for the Beach Road plot for the South Beach project.

SLA also sold a lot of land to the Housing Board then.

However, 1996 remains the record year for the Government when sales of $13.9 billion were chalked up.

In the financial year just past, the SLA sold 28ha of land to private companies and 180ha to the public sector.

In the 2008 financial year, 33.5ha went to private developers and 300.77ha were sold to the public sector.

The SLA, whose main focus is on optimising land resources, said it maintained a 79 per cent utilisation rate of state land - a four-year high and up from 77.8 per cent a year ago.

Occupancy for state properties was steady at 86 per cent.

Last year, the SLA leased out the conserved former Bukit Timah Fire Station, which is now being used as an arts and adventure enrichment hub for nurturing artistic talents.

The SLA also opened up and improved 317 free-to-use state land sites - the equivalent of 920 football fields. This was up from 284 sites a year ago, it said.

It has been opening up state land for casual community and recreational use over the past five years.

Overall, it was a difficult 12 months, said the SLA.

But the worst seems to be over. The authority could do better this financial year because of the abrupt recovery in the property market that has resulted in developers' hunger for sites, said Ngee Ann Polytechnic adjunct lecturer Nicholas Mak.

Since April, the sales volume of homes has risen astronomically while government land parcels have recently been sold at higher-than-expected prices.

More government land will be released next year.