Redevelopment of Singapore’s Paya Lebar Could Create 150,000 New Homes

Singapore Prime Minister Lee Hsien Loong announced this past weekend that the relocation of Paya Lebar Airbase over the coming decade would pave the way for up to 150,000 new homes and allow for taller buildings in nearby towns, a move that opens redevelopment opportunities for property developers.

Speaking at the National Day Rally on Sunday, Lee said the government plans to transform the airbase’s 3.8 kilometre (2.26 miles) runway into a greenbelt of community space with public and private housing to be built along both sides.

“The relocation will start in the 2030s, but the URA (Urban Redevelopment Authority) is already engaging the public and industry partners to explore redevelopment concepts,” Lee said in his latest address to the nation. “There will be amenities and recreational areas close by, as well as commercial and industrial developments, to bring jobs closer to our homes.”

While it will take decades to complete the redevelopment of the airbase, PropNex Realty chief executive Ismail Gafoor said the plan could help boost investor and homebuyer interest in the area, and even encourage owners to market ageing condo complexes for redevelopment.

Towering Condos Seen

Citing estimates from the Ministry of National Development, Lee said the 150,000 potential homes would equal the combined amount of housing built in the neighbouring communities of Punggol and Sengkang to date.

Lee gave more details on the long-awaited redevelopment plan more than 10 years after he first floated the idea of transferring the airbase to a new location east of Changi Airport in 2013.

“Once the airbase moves out, we can also lift some of the building height restrictions around it, for example in Hougang, Marine Parade or Punggol,” Lee said. “It will not happen overnight. But over decades, we can completely reimagine the eastern part of Singapore.”

Property analysts welcomed the news especially given the limited supply of sites that the government has made available in Paya Lebar to date. PropNex’s Gafoor said his firm expects high-rise developments of 30 to 40 floors in height could be developed in the area once restrictions are lifted.

“The transformation plan for the Paya Lebar Air Base site is exciting as it will free up a large swathe of land for redevelopment after 2030,” Gafoor said.

Integrated Development To Give More Value

The Paya Lebar development plan is unlikely to have an immediate impact on housing prices according to Xian Yang Wong, Cushman & Wakefield’s research head for Singapore.

Over the long term, Wong said the new development may have a higher proportion of public homes over private accommodations, while future amenities and reduced noise pollution should bode well for the existing residential area.

“Given its scale, it would mean the creation of an entirely new precinct in the eastern region of Singapore,” Wong said. “Development is expected to be phased and could take place over a few decades, perhaps 20 to 40 years.”

Placing at least one MRT station on the site would allow creation of an integrated development in the area, according to Christine Sun, research and consultancy head of OrangeTee & Tie. Sun noted that homebuyers have proved willing to pay a premium of up to 27 percent for homes located in integrated developments outside the city centre based on research by the property agency published Tuesday.

Among the recent mixed-use projects developed recently in Paya Lebar is Lendlease’s Paya Lebar Quarter, which includes the 429-unit Park Place Residence. Median rents for a three bedroom condo at Park Place currently stand at S$5,600 per month, or 65 percent above the average S$3,400 monthly median lease rate for an equivalent unit in the same district.

Singapore Reimagining Precincts

The master plan for Paya Lebar is one of a number of town-scale redevelopment projects being pushed by Singaporean authorities eager to keep upgrading their city.

In the city’s western area, development of the Jurong Lake District seeks to create a secondary hub for commerce and leisure, while the Greater Southern Waterfront project along the city-state’s southeastern coast works to extend the urban core into what had once been an industrial port area.

“Paya Lebar is just one example of how we are reimagining and transforming Singapore,” Lee said. “We are doing this all across the island – Jurong Lake District, Greater Southern Waterfront, and many other areas too. Each new estate will be more liveable, greener, and more sustainable than the previous one.”