1H2020 GLS program offers no surprises

1H2020 GLS program shows that Government offers no surprises for the property market

The Government on Dec 3 announced the first half 2020 (1H2020) Government Land Sales (GLS) Programme, which comprises three Confirmed List sites and eight Reserve List sites. These sites can yield about 6,490 private residential units, 114,000 sqm gross floor area (GFA) of commercial space and 1,070 hotel rooms.

The Confirmed List comprises two private residential sites [including one Executive Condominium (EC) site] and one commercial & residential site which can yield about 1,775 private residential units (including 600 EC units) and 22,000 sqm GFA of commercial space.

Supply of Private Housing

The Reserve List comprises four private residential sites (including one EC site), three White sites and one hotel site. These sites can yield about 4,715 private residential units (including 595 EC units), 92,000 sqm GFA of commercial space and 1,070 hotel rooms.

The supply of private housing units in the pipeline remains high, at around 39,000 units currently, even though it has declined progressively over the past few quarters. This pipeline supply comprises around 34,000 unsold units from GLS and en-bloc sale sites with planning approval, and an additional 5,000 units from sites that are pending planning approval.

While the demand for private housing units has increased in the past two quarters, the overall transaction volume has remained modest relative to the period leading up to the introduction of the property market cooling measures in July 2018. Meanwhile, developers’ demand for residential land remains moderate and there continues to be bidding interest for GLS tenders.

To continue to cater to the housing needs of the population, the Government has decided to keep the supply of private residential units on the Confirmed List for the 1H2020 GLS program broadly similar to that for the 2H2019 GLS Programme.

The Government said that will continue to monitor the property market closely and adjust the supply for future GLS Programmes, as necessary.

Supply of Commercial Space

The 22,000 sqm GFA of commercial space on the Confirmed List is mainly from the predominantly residential site at Jalan Anak Bukit with an integrated bus interchange, and will provide amenities for commuters and residents in the area.

The 1H2020 Reserve List includes a White site at Woodlands Avenue 2 for a mixed-use development, which is carried over from the 2H2019 Reserve List. 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 decentralising employment centres to bring job opportunities closer to homes.

Supply of Hotel Rooms

The 1H2020 Reserve List includes two sites at Marina View and River Valley Road, which are carried over from the 2H2019 Reserve List. These sites will provide ample opportunities for developers to initiate additional supply of hotel rooms over and above the current pipeline supply.

Commenting on the 1H2020 GLS program, Colliers International said, “The latest Government Land Sales Program for 1H 2020 maintains status quo with just three sites listed on the Confirmed list, with the bulk of sites listed on the Reserve list.”

Colliers added that the 1H2020 GLS program is also in line with market sentiments, where developers have become more cautious in land bidding activity.

“At the same time, it was highlighted that a pipeline of 39,000 residential units beckons. The holdback of supply on the Confirmed list would allow developers to focus on clearing their existing inventory while those who are keen to acquire land can look to the Reserve list as a viable option.

Residential
There are 6,490 residential units proposed for GLS 1H 2020, which is around the same number (6,430 units) released for 2H 2019. More residential units (4,715) were proposed in the Reserve list as compared to only 1,775 proposed residential units on the Confirmed list.

All three sites on the Confirmed list are new sites, with an EC site and two of the sites comprising commercial components. On the Reserve list, all four residential sites were from the 2H 2019 Reserve list. The three sites with residential components are located outside the CBD, which means that any residential developments in the CBD would likely arise from the implementation of the CBD incentive scheme.

Mixed-use
Of interest is the Jalan Anak Bukit site comprising 22,000 sqm of commercial space, with a retail cap of 7,500 sqm. The development will help to spruce up the Beauty World precinct, where there is a lack of office space and retail stock is predominantly aged. Furthermore, the injection of 865 residential units will rejuvenate the mature precinct. This project kickstarts the urban transformation of the Beauty World area as there will be more land parcels released in the area as reflected in the URA Master Plan 2019. The 7,500 sqm designated for retail will support the residential catchment, and is in line with URA’s plan to enhance street-level activities and add vibrancy to the area. A stipulated tender condition for this site is the inclusion of a bus interchange which will create a transport hub in the Beauty World area.

Overall, there are no major surprises in the 1H 2020 GLS Programme; it is measured supply introduced against a backdrop of measured demand. Mixed developments continue to be a big feature of URA’s plans. The availability of sites on the Reserve list will ensure flexibility in land supply, as well as development autonomy in growth areas such as the Kampong Bugis district in accordance with the URA Master Plan 2019.”

Commenting on the 1H2020 GLS program, Colliers International said, “as expected, the government continues to keep its finger on the pulse of the property market in Singapore, lining up a conservative slate of land supply.” It noted that the announcement of the first half 2020 GLS Programme “comes amid slowing economic growth, substantial pipeline of residential units, and relatively more muted demand for homes on the back of fresh cooling measures, which were implemented in July 2018.”