Outright Land Sales Remain Suspended

Source : The Business Times, June 4, 2009

Govt cites prevailing uncertainties; reserve list has 2 more sites

THE local property market may be showing signs of buoyancy but the Government is playing it safe by continuing to suspend the sale of 'confirmed'
land sites for six more months.

It cited 'prevailing market uncertainties' for the suspension.

Confirmed sites will definitely be put out to tender, as opposed to sites on the 'reserve' list which are put out to tender only if enough initial interest is shown by developers.

The move, said analysts, is prudent as it will allow the property market more time to stabilise. CBRE Research said that, notwithstanding the recent uptick in activity in the private home market, the Singapore economy remains weak.

The Government cannot be sure if the renewed buying interest will last, said Knight Frank's director of consultancy and research Nicholas Mak. There is ample 'reserve list' supply, he said.

The land sales programme for the second half will include almost all - 36 - of the reserve list sites carried forward from the first half, as well as two new sites. It is removing a white site at Outram Road as the site will be affected by future infrastructure works.

The Government had late last year removed all sites from the 'confirmed list' to help stave off oversupply risk as the sector was clearly on a downtrend.

The move to continue the suspension will 'provide flexibility for the market to adjust supply in accordance with current market economic conditions', said the National Development Ministry.

Despite the generally cautious approach, the Urban Redevelopment Authority (URA) has added to the reserve list a 505-unit condominium site in Bartley Road and a commercial-cum-residential site at Bedok Town Centre.

A URA spokesman defended the move, saying the two sites 'provide a greater variety of choices for developers if they desire to initiate more supply'.

'Although the outlook for the Singapore economy and property market remains uncertain, there are some positive signs of increased activities and investment interest in the property market.' For instance, some developers have enquired about reserve-list sale sites. There has been increased take-up of new private homes as well.

The release of the two new sites is also to meet planning objectives as the Bartley Road site will help to raise the ridership catchment for the rail line, he said.

The Bedok North site is part of rejuvenation plans for Bedok Town Centre. The proposed development will have to incorporate a new bus interchange.

Mr Mak reckons the Bartley Road site can fetch about $150 million, or $250 per sq ft per plot ratio (psf ppr) today while the Bedok site can fetch $280 million, or $300 psf ppr. Both are in attractive locations, with the latter most certain to draw developers' interest as Bedok New Town has no shopping major mall, said CBRE Research director Leonard Tay.

Other sites that might interest developers include the residential ones in Bishan, Dakota Crescent and Serangoon Road, and maybe a few smaller-sized hotel sites, he said. But office sites are off developers' radar screens as the sector remains very weak.

Meanwhile, supply from other government agencies will include only 28,000 sq m of gross floor area of commercial space, down from a planned 40,000 sq m for the first half.