Relocation of Paya Lebar Air Base could improve the en bloc prospects of nearby condominiums. analysts

Aug 23, 2022



With the relocation of Paya Lebar Air Base (PLAB) and the subsequent lifting of building height restrictions, some resale condominiums in Paya Lebar, Marine Parade, and Hougang may have a better chance of a collective sale, while aging HDB flats in certain neighboring towns may qualify for the Selective En bloc Redevelopment Scheme (SERS).

In his National Day Rally address on Sunday (August 21), Prime Minister Lee Hsien Loong emphasized that the relocation of PLAB, scheduled for the 2030s, will free up approximately 800 hectares of land, allowing for the construction of 150,000 new public and private homes.

In addition, the relocation of the military air base will result in the elimination of building height restrictions in the surrounding area, allowing for the redevelopment of cities such as Hougang, Marine Parade, and Punggol. Additionally, PM Lee stated that the redevelopment of neighboring towns could result in a more efficient use of space and the addition of additional amenities.

The Urban Redevelopment Authority (URA) has initiated outreach to the general public and business partners regarding potential redevelopment concepts.

Christine Sun, senior vice-president (research & analytics) at OrangeTee & Tie, estimates that 30,000 to 50,000 private homes and 100,000 to 120,000 HDB BTO flats may be planned for the Paya Lebar site, implying 100 to 130 BTO launches with 700 to 1,500 units per project. At a rate of five BTO projects per year, the BTO supply would last between 20 and 25 years.

In the meantime, she anticipates forty to seventy executive condominium (EC) and condominium launches, assuming large condos with 500 to one thousand units. If MRT lines are extended or new MRT stations are constructed, the government may also plan new integrated developments, white sites, or mixed development sites in the area.

Sun added, "There should be a healthy demand from upgraders if new condominiums are constructed in the area." Moreover, due to the ample space available, larger land parcels or condo developments with ample amenities may be constructed."

Despite the fact that buyers can anticipate more affordable housing in the future due to the injection of supply, analysts predict that the supply situation will remain tight in the near future as demand for housing – particularly in the suburbs – remains robust.

Lee Sze Teck, senior director of research at Huttons, estimates that the first BTO project will be completed approximately five years after the relocation of the air base.

The head of research at Cushman & Wakefield, Wong Xian Yang, believes that development will occur in phases and, given the size of PLAB, could span 20 to 40 years.

Wong stated, "Given its size, (the redevelopment of Paya Lebar) would necessitate the establishment of an entirely new district in Singapore's eastern region. The relocation of the air base will result in the introduction of new amenities and a reduction in the area's noise footprint, which bodes well for existing homes in the area.

While overall housing prices are expected to rise in tandem with economic growth over the long term, an increase in housing supply could moderate price growth.

As a result of the removal of height restrictions, older buildings in the surrounding neighborhoods can be redeveloped and built taller, thereby increasing their chances of being sold collectively, as Sun emphasized.

"The modification may increase the en bloc potential of some resale condominiums in Paya Lebar, Marine Parade, and Hougang. Some of the condominiums launched in the past that are less than 20 stories tall may have future redevelopment potential," she added.

Assuming that a site's plot ratio has not been maximized due to height restrictions, the relaxation of height restrictions will increase the site's en bloc potential.

And older HDB flats in Hougang and Marine Parade that were completed before 1980 are viewed as potential candidates for SERS, as taller flats can be constructed in their place to maximize the use of land, as suggested by Sun. In a decade, 8,871 flats in Hougang and Marine Parade will be older than 50 years old, according to OrangeTee.

However, Lee also noted, "While some older flats in Marine Parade are ripe for SERS, there must be a nearby site suitable for relocating residents."

As far as amenities are concerned, Huttons' Lee noted that with PLAB in place, traffic must currently circle the entire air base. Once the air base has been relocated, however, "park connectors and cycling trails could be connected across the island and into (future) Paya Lebar," he said. Additionally, there are nearby waterways that can be repurposed.

In his speech, Prime Minister Lee also proposed that the 3,8-kilometer-long air base runway be repurposed as the future town's spine and converted into a green connector or community space. Then, public and private residences could be built on both sides of the spine.