Singapore’s government is launching sites that can yield a total of up to 8,040 private residential units in the second half of 2018, keeping pace with new supply in the first half, while ramping up the commercial real estate pipeline by 94 percent.
The plan under the Government Land Sales (GLS) Programme, announced by the Urban Redevelopment Authority (ULA) on Wednesday, calls for the release of six Confirmed List sites and nine Reserve List sites that can deliver a total of up to 124,200 square metres of commercial space and 930 hotel rooms in addition to the housing units.
The Confirmed sites include four private residential sites and one “white” site with flexible uses, as well as the first hotel site offered in five years. The Reserve sites – those which can be triggered for sale if developers apply with a minimum price acceptable to the government – include seven private residential sites and two white sites.
“The slate of sites offered in the GLS programme for H2 2018 continues to demonstrate the Government’s measured yet responsive approach to the sale of public land,” commented Tricia Song, head of research for Singapore at property brokerage Colliers International in a statement. “It reflects that policy makers are keeping their finger on the pulse of the market, providing adequate land supply to meet varying real estate needs in Singapore.”
URA Says Housing Pipeline Is “Healthy”
Private home prices in Singapore jumped by 4 percent in the first quarter of the year as the property market rebounds, but the URA argues that the new supply plan, which keeps the total pipeline of residential units at roughly the same level as the first half, is adequate for the city-state’s demands.
“Taken together, the total supply in the pipeline will be able to meet home buyers’ demand over the next 1 to 2 years, and to meet our population’s housing needs,” the URA said.
The government agency notes in the statement that the current pipeline of housing units is “healthy,” consisting of around 20,000 units from GLS and en bloc site sales that await planning approval, plus 24,000 unsold units from approved projects. There are also more 30,000 existing private housing units that remain vacant.
The URA says, however, that its decision to keep the pipeline steady reflects developers’ growing appetite for land and rising transaction volumes. A property market upswing over the past three quarters has prompted a series of aggressive land bids by developers this year, such as a record S$410 million ($309 million) offer for a residential site near Orchard Road by a cross-border consortium in April.
The government made a total of 8,045 residential units available in the first half, including 2,775 units available under the Confirmed List and 5,270 units under the Reserve List.
Singapore Gives Hotels a Chance
The new plan also rolls out commercial sites that represent a 94 percent increase on the 63,960 square metres made available in the first half. Among the land offered is a Confirmed hotel site, which can generate an estimated 390 rooms on Club Street in the downtown business district.
The Reserve list also includes a white parcel at Marina View which can potentially yield an estimated 540 hotel rooms. The last time hotel sites were put on either list was the second half of 2013, according to Colliers.
“We believe the policy makers have been pragmatic in their approach towards the sale of hotel sites via GLS, holding off new site launches for a decade to allow the relatively large number of rooms in the market to be absorbed,” commented Govinda Singh, executive director of valuation & advisory for Asia at Colliers in the agency’s statement.
“Now that concerns of an oversupply in hotel rooms have largely receded, the Government has stepped forth to provide land options for the hotel sector.”