Ravi Chandran
The Government on Dec 6 announced the first half 2019 Government Land Sales Programme (1H2019 GLS Programme), which comprises five Confirmed List sites and nine Reserve List sites. Together, these sites under the 1H2019 GLS Programme can yield about 6,475 private residential units, 86,000 sqm gross floor area (GFA) of commercial space and 1,115 hotel rooms.
The five Confirmed List sites under the 1H2019 GLS Programme are private residential sites [including one Executive Condominium (EC) site] which can yield about 2,025 private residential units (including 385 EC units) and 4,000 sqm GFA of complementary commercial space.
The Reserve List under the 1H2019 GLS Programme comprises six private residential sites (including one EC site), two White sites and one hotel site. These sites can yield about 4,450 private residential units (including 525 EC units), 82,000 sqm GFA of commercial space and 1,115 hotel rooms.
Supply of Private Housing
The Government said that the supply of private housing units in the pipeline has grown significantly and is currently at 45,000 units. This comprises around 31,000 unsold units from GLS and en-bloc sale sites with planning approval, and an additional 14,000 units from sites that are pending planning approval. In addition, there are around 28,000 existing private housing units that remain vacant.
These are from awarded GLS and en-bloc sale sites, as well as Confirmed List GLS sites that have not been awarded yet, as at 3Q2018.
In contrast, demand has started to moderate. Following the introduction of the property market cooling measures in July, overall transaction volumes have declined, while developers’ demand for land has also moderated.
Given these factors, the Government said that it has decided to moderate the total supply of private residential units for the 1H2019 GLS Programme.
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A total of 8,040 private residential units were made available via the 2H2018 GLS programme, comprising 2,705 units from the Confirmed List and 5,335 units from the Reserve List.
The Government believes that together with the supply in the pipeline, this will sufficiently cater to the housing needs of our population. It said that it will continue to monitor the property market closely and adjust the supply from future GLS Programmes, as necessary.
Supply of Commercial Space
The 1H2019 Reserve List will have one White site at Woodlands Avenue 2 for a mixed-use development. This will help to sustain the development momentum of Woodlands Regional Centre as a major commercial node outside the city, in line with the Government’s objective of bringing job opportunities closer to homes.
Supply of Hotel Rooms
A new hotel site at Sims Avenue will be added to the 1H2019 Reserve List. Together with the existing White site at Marina View carried over on the Reserve List from the 2H2018 GLS Programme, there will be ample opportunities for developers to initiate additional supply of hotel rooms over and above the current pipeline supply.
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Commenting on the 1H2019 GLS Programme, JLL said:
“The government has continued on its conservative stance and trimmed the supply of government land sales for private homes (excluding ECs) by 18.4%, from 2010 units in the 2H2018 Confirmed List programme, to 1,640 units in the 1H2019 Confirmed List Programme. This is in response to their concern about the huge supply pipeline to be generated from the buoyant collective sales in 2017 and 1H2018.
The number of buildable private housing units from the residential plots that will be made available for sale on the reserve list in the 1H 2019 programme has also fallen by 18.6% to 3,925 units, from the 4,820 units in the 2H 2018 programme.
In terms of location, the site at Tan Quee Lan Street is assessed to be the most attractive as it is located right next to the Bugis MRT station. The fact that the government has moved the site from the Reserved List on the 2H 2018 programme to the Confirmed List on the 1H2019 programme indicates its desire to build on the momentum gathered from the completion of new skyscraper developments such as South Beach and DUO, as well as the upcoming Guoco Midtown scheduled for completion in 2022 in its efforts to rejuvenate the Bugis area.
However, it is a fairly large site and together with its prime location could translate to a rather substantial capital outlay that could limit the number of interested bidders to those with larger risk appetite.
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The Bernam Street and one-north Gateway sites on the Confirmed List could draw a healthy level of interest from developers for their bite-size plot sizes which would be more digestible for small and medium-sized developers amid the current cautious market sentiment. The one-north Gateway site is also in a location which has been starved of new residential supply. The last time a new residential project was launched in one-north was more than 10 years ago when The Rochester and One North Residences were launched for sale in 2007
The sole EC site in the 1H2019 Confirmed List should draw keen competition from developers, and help to rebuild the stock of EC supply in the market. To some extent, this should provide some relief to the sandwiched class of potential home purchasers.
It is a good approach for the Government to continue to ensure a steady stream of land supply for private homes to prevent a repeat of the situation in 2017/1H2018 when developers’ depleting landbank led to the overheated land market accompanied by runaway land prices.”
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