Govt May Be Taking Steps To Calm Down The Property Market, Say Analysts

Source : Channel NewsAsia, 02 September 2009

The government could re-introduce land sales through the confirmed list and analysts said this could mean the government is taking steps to cool down the property market.

Last October, recession woes saw the government suspending land sales through the confirmed list. But now the government said it will consider re-introducing it for the first half of next year.

National Development Minister Mah Bow Tan said: "Now that the market is coming back, demand is coming back and the take-up is strong. There is every likelihood that we will resume the confirmed list."

This means land parcels will be tendered according to scheduled dates and this will translate to more residential property launches. But one analyst said while these changes will ease the market, they will take time to make any impact.

Nicholas Mak, property consultant, said: "This may be the first of actions by the government if they see that the property market shows signs of overheating especially if there is a lot of speculative buying, I think that could prompt the government to take further action."

Public housing prices have gone up by almost 35 per cent over the last two years and the government said it is expecting prices to increase even further. However, it said buyers should not be complaining because these price increases are part of the reason why people invest in the first place.

Mr Mah added: "When you buy an HDB flat, you are investing for your future. We subsidise when you buy, we increase the value of the flat as you live in it and encourage you or facilitate you to cash out when you grow old."

Mr Mah was speaking on Wednesday at the launch of the final skybridge at the Pinnacle @ Duxton, Singapore's tallest public housing project.

He said while public housing remains affordable, with a range of flats to suit people from all levels of income, Singaporeans should continue to buy within their means. - CNA/vm

Govt May Restart Land Sales

Source : The Straits Times, Sep 2, 2009

THE Government is considering reinstating the 'confirmed list' of new sites for sale at its year-end review - a move seen by experts as a measure to cool the buzzing property market.

National Development Minister Mah Bow Tan (left) said: 'As far as (private home) prices are concerned, we want to make sure the property market do not become overheated.' --ST PHOTO: JOYCE FANG

National Development Minister Mah Bow Tan said on Wednesday: 'As far as (private home) prices are concerned, we want to make sure the property market do not become overheated, that there is no excessive speculation.'

'The government is monitoring the market very closely. If there's any necessity, obviously we will take certain actions. One of the things we are looking at is the Government land sales,' he told reporters at the launch of the final skybridge at Singapore's tallest public housing project The Pinnacle@Duxton. It has 1,848 units, of which 111 are unsold.

Bringing back the confirmed list is a 'a definite possibility', said Mr Mah.

The Government suspended the confirmed list of sale sites last October when the property market was in the doldrums and Singapore slipped into a recession.

'Now that the market is coming back, demand is coming back and the take-up is strong, there's every likelihood that we will resume the confirmed list,' said Mr Mah, adding: 'It's a question of how much we put on the confirmed list.'

Restarting the confirmed list was a measure suggested by property developer Kwek Leng Beng as a possible Government move to cool the market.

Singapore's market for new home sales have shot through the roof recently, with some projects sold at benchmark levels.

Resale prices of many popular projects have also risen from the lows early this year.

In tandem with the recovery in the Singapore economy, Mr Mah said HDB resale flat prices will continue to rise this year - by perhaps 1 or 2 per cent.

Development Charge Rates Cut

Source : The Straits Times, Aug 31, 2009

THE Government on Monday announced cuts of 2 to 4 per cent on average to the development charge (DC) rates that developers pay for enhancing the use of sites.

The new rates will apply from Sept 1 to Feb 28, 2010 and will apply to projects which have been granted provisional permission. The revised rates take into account current market values and are reviewed every six months.

The DC rates for commercial use, business zone comercial use as well as for hotel cum hospital use have dropped by 4 per cent, while that for non-landed residential sites is down 2 per cent, said the National Development Ministry in a statement

There are no changes to the use Groups and the number of geographical sectors.

Industrial Site Sales Still Off

Source : The Straits Times, July 2, 2009

THE Ministry of Trade and Industry (MTI) said on Thursday it will continue to suspend the confirmed list for its industrial government land sales (GLS) programme for the second half of 2009.

--PHOTO: HANDOUT

This will provide flexibility for the market to 'adjust supply in accordance with the current economic conditions' said MTI in a statement.

But to meet potential demand for industrial land, MTI has put three new sites on its reserve list.

Under the reserve list system, a site is only offered for public tender if the government receives an application from a developer who commits to bid for the site at a price which is deemed acceptable.

These are a 3.2 ha site at Woodlands Avenue 12, a 2.99 ha site at Kaki Bukit Avenue 4 and a 1.24 ha site at Ubi Road.

All three sites have a lease of 60 years and are estimated to become available in the last quarter of this year.

Analaysts say MTI's announcement was not surprising given the uncertain economic climate, but noted that interest was stirring in the industrial sector.

More sites may be triggered for tender by year end, they added.

In total, the reserve list for the second half of the year comprises nine sites with a total site area of 19 ha, said MTI.

S'pore Says No Confirmed Land Sales In H2

Source : The Business Times, July 2, 2009

Singapore's government said on Thursday it will continue to suspend the sale of land on its 'confirmed list' in the second half of 2009 due to economic uncertainties.

The government did, however, add three sites to its 'reserve list', increasing the number of land parcels that may be sold to nine from six.

Singapore will only release a site on its 'reserve list' for sale if an interested party submits an application for the site at a price that is acceptable to the government. -- REUTERS

Condo Sub-Division Without Tears

Source : The Business Times, April 18, 2009

A look at the pitfalls and tax considerations when slicing and dicing apartment space

THE Urban Redevelopment Authority has said that when processing applications to sub-divide apartments, it is guided by whether sub-division will change the character of a development and diminish the amenities of other people living there, such as families.

GRANGEFORD - Given the credit crunch, developers are looking for ways to conserve cash. Hence, the advent of a master tenant willing to lease all or many apartments in an en-bloc development bought during better times is welcome news

The authority was responding to a follow-up report in The Business Times after the recent case of Grangeford condo, where a master tenant sub-divided 140 apartments into 600 smaller units with a layout resembling a dormitory.

URA told BT earlier this week this is not allowed because the site is zoned for residential use only, and that it and other government agencies will take enforcement action against any party responsible for any unauthorised use and for not complying with requirements.

Some industry observers say that owners of apartments in other developments have carried out similar sub-divisions, though on a much smaller scale than at Grangeford.

URA outlined three scenarios.

In the first scenario, which it has encountered over the past two to three years, there have been a few cases where a handful of apartments were converted into a larger number of mini-apartments.

'These are essentially smaller, but independent residential apartments with self-contained facilities like kitchen, living room and bathroom,' a URA spokeswoman said.

'Where the conversions were able to comply with planning requirements, URA followed up with the owners and they obtained approval from URA.

'For those that were not able to comply with planning and other technical requirements, URA followed up and took enforcement action.'

Such conversions require planning approval from URA and consent from the development's management corporation.

In the second scenario, apartments are split into a dormitory-style layout. The split units are essentially bedrooms, without their own kitchen, toilet or living room.

URA approval is needed for a change of use from residential to non-residential use - for instance dormitory or boarding house use. As a rule of thumb, URA will not approve such a conversion in a residential area, the spokeswoman said.

BT quizzed URA about a third scenario, in which an apartment is not sub-divided but is sub-let to several unrelated tenants. For example, several students might join forces to rent an apartment.

The URA spokeswoman said that sub-letting for residential use on a unit basis is allowed, but URA may have concerns if this is done on a large scale.

'It goes back to the fundamental considerations of whether such a sub-letting exercise will change the character of the development or cause disamenities to, say, families living there,' the spokeswoman explained.

Apartment sub-division is becoming an important topic, especially for developers who bought entire residential projects in Singapore's prime districts through collective sales during the property bull-run from 2006 to 2008 and have had to defer redeveloping these properties because of the massive slide in the value of high-end homes.

Developers also face the burden of footing the property tax bill, with the annual value (AV) of the property based on 5 per cent of the freehold market value of the land.

Following representations by developers last year, the Inland Revenue Authority of Singapore (IRAS) agreed in September to a different basis for assessing AV for en-bloc properties where developers have changed their intention by renting out apartments instead of redeveloping the site.

The property tax for such properties will be based on the estimated total annual rent that can be fetched by all the apartments in the development - provided at least 25 per cent of the apartments have been leased on tenancies of at least a year, and on an arm's length basis, to parties not related to the developer. Also, there must not be any provision in these tenancy agreements to evict tenants within the tenancy period.

Let's take the case of Grangeford. Assuming the 193 apartments fetch an average monthly rent of $4,000, the AV would be $9.3 million ($4,000 x 12 months x 193). Based on the 10 per cent property tax rate, the property tax bill would be $930,000.

This is much lower than if Grangeford's AV was assessed at 5 per cent of the estimated freehold market value of the land.

The site had a remaining lease of 66 years when Overseas Union Enterprise bought it in 2007 for $625 million. Let's assume the freehold value of the site today is about $520 million, taking into account lower property values. The AV would be 5 per cent of this, or $26 million, and at 10 per cent property tax rate, OUE's tax bill would be $2.6 million.

Given the credit crunch, developers are looking for creative ways to conserve cash. Hence, the advent of a master tenant willing to lease all or many apartments in an en-bloc development bought during better times is welcome news - as it allows the developer to qualify for the more favourable AV formula if at least a quarter of the apartments are leased to the master tenant for minimum period of one year.

Given the tough market for the high-end residential sector, it would be an uphill battle for a developer to try to find tenants for individual apartments. Also, some tenants may want short-term leases of a few months, so that would not comply with the condition of a minimum one-year lease set by IRAS. A master tenant willing to sign a longer lease of one or two years solves this problem for developers.

These were probably some of the considerations that OUE weighed for Grangeford when it signed a two-year master lease with Ideal Accommodation for 170 apartments with effect from Jan 1, 2009. Of these 170 apartments, Ideal split 140 apartments into a total of 600 units. In the process, most of the units have been left with unventilated corridors and without access to rubbish chutes. The former kitchen and living room areas have been boarded up to create new units. Tenants of some units have to share toilets.

'Once a developer brings in a master tenant, there is the possibility that it may lose some control of the environment and ambience,' says DTZ executive director Ong Choon Fah.

'When the environment becomes different - a lot of en bloc properties that developers can't develop now are in prime locations and very desirable residential areas - it may create social issues. It's not just as far as families in apartments in the developments are concerned, but also families living in the surrounding area who may have the perception that the neighbourhood is no longer the same because of transient neighbours.'

Govt Stops Outright Land Sales

Source : The Straits Times, Nov 1, 2008

Only exec condo site to proceed, while tenders for other sites cancelled

THE Government has largely put a halt to outright land sales until the middle of next year to help stave off the risk of oversupply as the property sector keeps heading south.

Most development sites it had previously slated for definite release this year will be shifted to a reserve list where properties are offered for sale only if adequate interest is registered by developers.

Property players hailed the move, saying it will alleviate the pressure of a supply glut and help inject some much-needed confidence into the market.

'The Government is recognising the market situation is more severe than forecast, given tight credit and high construction costs,' said Savills Singapore's director of marketing and business development, Mr Ku Swee Yong.

'It's fantastic news. It demonstrates the Government is on top of the property situation, sensitive to the health of the property market,' said Real Estate Developers Association of Singapore president Simon Cheong. 'More importantly, it shows that it is prepared to come up with other measures if the market deteriorates further as the health of the property market has major implications for the Singapore economy.'

Official data shows that property prices here have started to slip. While they have yet to plunge, sentiment has deteriorated dramatically in recent weeks.

As the global financial crisis deepens, property stocks have been battered and banks here have tightened credit to developers. Industry sources say banks have become more selective in who they deal with, with one saying lending for new projects is hard to secure.

In the office and residential markets, there are fears of an oversupply. The office market expects a large supply to come onstream from 2010. There is a long pipeline of residential launches. 'We all know about supply but demand is the unknown quantity,' said Chesterton Suntec International's Mr Colin Tan.

Knight Frank managing director Tan Tiong Cheng said: 'This is one small measure which will be a relief to developers who are worried about further supply coming to the market. It is also a signal that the Government is prepared to stabilise the market, and not allow it to go the way of equities.'

A Hong Leong Group spokesman said: 'Given the unprecedented global financial crisis we are in, the steep tumble in stock markets and serious slump in the property sector, any action that can alleviate the situation will be welcomed.'

Yesterday, the Government said that it will cancel the tenders for two out of three confirmed sites that were launched but not yet closed. It will allow the outright sale of an executive condominium.

Of four remaining confirmed sites for sale this year, three will be moved to the reserve list and one will be removed.

Developers like the reserve list system as it allows them to adjust supply to meet demand. It was the only sale method used for nearly four years after the slowdown in the wake of Sept 11, 2001.

Of the cancelled sites, one is for a transitional office site at Mountbatten Road while the second is for a white site - which can be used for different functions, such as residential or commercial - bordered by Rochor Road and Ophir Road.

Transitional office sites, aimed at easing the tight office supply, have lost their appeal as more supply will come in 2010.

The Government did not award a recent transitional site tender as the one bid received was 'too low' and has since moved it to the reserve list. The Government has also suspended the sale of confirmed sites in the first half next year and will sell only reserve list sites.

The Ministry of National Development also lifted a ban imposed 18 months ago on the conversion of office buildings into apartments in the city area.

The Urban Redevelopment Authority imposed the ban in May last year to ease an office space crunch. It was to have lasted till the end of next year.

While a rush of conversion projects is not expected, the move gets rid of an unneeded ban and will help to lift the confidence level in the market, experts say.

The ministry said the changes will allow the market time to assess and respond. 'While Singapore's fundamentals remain sound, the global economic uncertainties have affected Singapore's economic outlook, as well as the outlook for the property market,' it said.

MND Changes Government Land Sales Programme For Greater Flexibility

Source : Channel NewsAsia, 31 October 2008

The National Development Ministry has announced changes to the Government Land Sales (GLS) programme for the rest of 2008.

It said that while Singapore's fundamentals remain sound, the global economic uncertainties have affected the outlook for the country's economy and property market.

There were three main changes.

Firstly, most of the sites under the confirmed list are being transferred to the reserve list.

This gives flexibility as the government will only release a site for sale if an interested party submits an acceptable minimum price.

Secondly, the confirmed list for the GLS programme for the first half of 2009 will be suspended.

Thirdly, the existing ban on conversion of office space in the central area to other uses will be lifted.

The temporary ban had started in May 2007 to ease the office space crunch. - CNA/yt

Bay Window, Planter Box Rule Change To Kick In Later

Source : The Straits Times, Sep 23, 2008

ABOLISHMENT OF URA EXEMPTION

Grace period extended till Dec 31 to give firms more time to adjust

THE fate of the bay windows and planter boxes in private condominiums has been sealed, and homebuyers could see less of such features.

The Urban Redevelopment Authority (URA) is standing by its decision to abolish the exemption of such features in gross floor area (GFA) calculation.

But a recent appeal by the Real Estate Developers' Association of Singapore

(Redas) has prompted the agency to give property firms more time to adjust.

It has extended the grace period until Dec31. The new guidelines were originally meant to take effect from Oct7. With the extension announced yesterday, any application made by developers before Jan 1 will still be considered under the old guidelines.

'We have received feedback from the industry that many projects are at advanced design stage using the (old) guidelines, and a longer grace period would be very useful,' said URA development control division director Han Yong Hoe.

Bay window and planter boxes, which often make up about 5 per cent of a condo's saleable area, used to be exempt from GFA calculations. But developers who provided such features could charge buyers for it as it was built as part of a unit.

The URA caught the industry by surprise on July 7 when it stated that the features would no longer be exempted from GFA calculations, starting from Oct 7. It was reported at the time that the move would close a 'loophole' that developers had been exploiting and profiting from.

Developers such as UOL Group and City Developments have since refuted suggestions that they have been getting free GFA, pointing out that the value of these features was calculated in the bidding and pricing of land.

Mr Han said yesterday that the URA's regular rules review found that the original objectives for GFA exemption were not being met.

The GFA exemption for bay windows was to give developers incentives to introduce desirable building features, and add 'articulation' to otherwise 'flat- or boring-looking' buildings.

But the URA said that even with the GFA exemption for such windows, building facades could still look plain.

It also said that bay windows were contributing to the air-conditioning load and making buildings less energy-efficient.

Planter boxes were introduced to provide greenery and visual relief to high-rise condominiums.

But the URA found that less than 10 per cent of planter boxes were actually used for greening purposes. And those not used created maintenance issues, including mosquito breeding. Many were also illegally converted into balcony space or living room extensions, said the URA.

Mr Han said the change might even encourage more unique residential projects, as architects were no longer obliged to include these features in all buildings.

On whether the new guidelines would affect future bidding prices for land - a possibility highlighted by some property analysts - Mr Han said land prices depended on many factors, and it was hard to say whether this factor alone would 'have an effect on the bid price'.

Redas executive director Chia Hock Jin said the association was discussing the latest development.

Old Bay Window Rules Valid For 3 More Months

Source : The Business Times, September 23, 2008

Deadline extended as many projects are at advanced stage of design, says URA

The Urban Redevelopment Authority (URA) will extend by three months the deadline for submission of provisional permission (PP) applications for new developments based on existing bay window and planter box guidelines.

URA said yesterday it has received feedback from developers that many projects are at an advanced stage of design using the old bay window and planter box guidelines.

The deadline for PP submissions was originally Oct 6 but developers asked for a longer grace period, URA said. The deadline has therefore been extended to Dec 31.

On July 7, URA announced that developers would have to include bay windows and planter boxes in total gross floor area (GFA) calculations. Previously they were exempt.

URA says bay windows are increasingly treated as internal floor space and few home owners use planter boxes for plants. The change in the guidelines is not expected to have a big impact on on-going projects. URA said that since the announcement there has been no 'spike' in PP submissions.

When the change was announced, the industry responded by saying that with no incentive to provide bay windows or planter boxes, buildings would start looking 'flat'.

But TID, which won the tender for a residential site next to Tanah Merah MRT station in September, said that despite the withdrawal of the GFA incentive, it has 'included bay windows and planter boxes in the design as it enhances livability'.

A spokesman for TID, a partnership between the Hong Leong Group and Japanese real estate company Mitsui Fudosan, said: 'With the extension of PP submission deadline, TID will have more time to finalise its proposal.'

Another aspect of the extension is that developers who priced in the GFA incentive when they bid for sites will now have more time to make submissions so their breakeven costs stay on track.

For a consortium led by Hoi Hup Realty, which won the tender for a Housing and Development Board Design, Build and Sell Scheme site at Lorong 1A Toa Payoh in August, submitting a PP application before the deadline could mean slightly lower prices for buyers. A Hoi Hup spokesman said launch prices could be 5-10 per cent lower than they would be without the GFA incentive.

URA is open to reviewing the new guidelines in a couple of years. 'The industry could possibly come up with innovative designs in response to the revised guidelines,' it said.

Building Premiums Waived For Lease Extensions

Source : AsiaOne, Sep 01, 2008

The Government will with immediate effect waive the collection of building premium where lease extensions are granted.

A land premium and a building premium are currently charged when extending a State lease, based on the Common Law principle that both land and buildings would revert to the Landlord at the end of the lease.

In 1997, the Government decided to waive the building premium for short-term industrial and institutional leases. The change was made on the recommendation of the Committee on Singapores Competitiveness.

The Government has further reviewed the policy on the charging of a building premium when extending a State lease. The Government has decided to waive the building premium when a lease extension is granted because this will encourage lessees to continue to invest in the upkeep and improvement of the property.

Extension of State leases will be on a case-by-case basis where they are in line with planning intention and help to further specific economic and social objectives.

URA In Eatery, Nightspot Review

Source : The Business Times, August 30, 2008

THE Urban Redevelopment Authority (URA) is reviewing the activities allowable in restaurants, food shops and pubs located in private shophouses.

One of the considerations is to allow more flexibility in providing live entertainment on the premises of restaurants and pubs.

Currently, live music and performances are not allowed in restaurants at private shophouses near residential estates.

URA has allowed pubs to operate along some main roads on the fringe of residential estates, but live entertainment is not allowed either.

Under URA's guidelines, the primary purpose for 'restaurants' is the sale of food while that of bars and pubs is the sale of alcoholic drinks.

As such, any restaurant, bar or pub that wants to provide live entertainment will need to apply to URA for a 'change-of-use'. For instance, a pub might need to be designated a 'nightclub' instead, as the guidelines for nightclubs do allow for the sale of alcoholic drinks with singing, dancing or live entertainment.

And the operator will still need to comply with licensing controls of various agencies such as the National Environmental Agency, the Police Entertainment Licensing Unit (PELU) and even the Land Transport Authority, depending on the traffic conditions. However, the process of applying for these licences is not as odious as it may sound.

An operator of a bar close to a residential neighbourhood who did not want to be named said that he had applied for and received a licence for live entertainment from PELU quite quickly. However, he was not aware that he also had to apply to URA for a 'change-of-use'.

Indeed, URA reveals that for the last three years, it has approved five applications for 'change-of-use' from restaurant to nightclub and one application from pub to nightclub.

A restaurant operator that provides occasional live entertainment (who also did not want to be named) revealed that after checking with PELU, it found that it was exempt for having to apply for a licence at all.

According to the Public Entertainment and Meetings Act, it does appear that PELU exempts certain performances from requiring licences if, for instance, these end before 10.30pm and the event is not held at the same place for more than three consecutive days within a month.

More flexibility will favour the business community. However, as the operators that BT spoke with have found, the neighbourhood residents are not always happy.

Development Charge Rates Mostly Flat

Source : The Business Times, August 29, 2008

The Ministry of National Development (MND) has left development charge (DC) rates - which may be payable for enhancing the use of some sites or building a bigger development on them - unchanged for most use groups, including commercial, landed residential and hotel/healthcare.

However, the average DC rate for non-landed residential use has been trimmed 6 per cent while the average DC rate for the industrial/warehouse use group increased by 0.1 per cent.

The new DC rates take effect from Sept 1, 2008. MND revises the DC rates twice a year in consultation with Chief Valuer, who takes into account current market values.

DC rates are listed by use groups across 118 locations or geographical sectors throughout Singapore. Under the latest revision, the boundaries of eight geographical sectors have been re-demarcated to better reflect current market values.

CPF Keeps OA Interest Rate At 2.5%

Source : The Business Times, August 14, 2008

Concessionary rate for HDB mortgage loans remains 2.6%

THE Central Provident Fund Board (CPF) will continue to pay 2.5 per cent interest per annum for members' savings in their Ordinary Account (OA) from Oct 1 to Dec 31.

Savings: The interest rate for the Special, Medisave and Retirement accounts (SMRA) for October to December will be announced next month

CPF said that although its computed interest rate derived from the rates of major local banks for the period May 1 to July 31 works out to be 0.74 per cent per annum, the higher rate of 2.5 per cent will be paid because that is the minimum specified under the CPF Act.

The Housing and Development Board (HDB), meanwhile, has announced that the concessionary interest rate for HDB mortgage loans, pegged at 0.1 of a percentage point above the CPF interest rate for the OA, will remain unchanged at 2.6 per cent per annum from Oct 1 to Dec 31.

The interest rate for Special, Medisave, and Retirement accounts (SMRA) for October to December will be announced next month.

The prevailing CPF interest rate for SMRA is 4 per cent, based on the 12-month average yield of the 10-year Singapore Government Security plus one per cent.

To help members adjust to this floating rate, the 4 per cent floor for the SMRA rate will be maintained for the first two years, as earlier announced.

An extra one per cent interest will continue to be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the OA.

The extra interest from the OA will go into members' Special or Retirement accounts to enhance their retirement savings.

Analysts' Views Mixed Over H2 GLS List

Source : The Business Times, June 23, 2008

Generally, they welcome more sites on the reserve list

THE Government Land Sales (GLS) programme for the second half of this year has triggered mixed responses from property analysts.

While some read the moderate supply as a plus for property prices, others feel it reaffirms the weak market sentiment.

The GLS list for the second half of 2008 sees 13 new sites - comprising six residential sites, three commercial sites, three hotel sites and one white site. That's lower than the 17 new sites released in the first half.

Of the total 40 sites being offered in the second half, there are only eight confirmed sites, down from 11 in the first, and 32 are on the reserve list, up from 26.

'We see the 2H08 GLS list as reflective of the current market sentiment, following softer bids and the non-award of three tenders in the last six months,' says Citi analyst Wendy Koh.

Westcomb Research, however, views the reduced supply positively, saying that it 'will ease the current urge of developers to release their existing land bank under the current weak demand and reduce downward price pressure'.

Property stocks were a mixed bag on Friday, with CapitaLand up 36 cents at $6.08, Keppel Land up seven cents at $5.20, and GuocoLand down 25 cents at $2.18.

Generally, analysts welcome the market-driven approach to have more sites on the reserve list, in which sites are put up for sale only after developers have indicated interest by committing to a minimum bid.

'It affords the market some breathing space and developers and the market should read the decrease in the confirmed list quantum positively,' says DBS Vickers analyst Adrian Chua in a report.

Deutsche Bank notes that choice of sites was strategic in driving the development of new areas under the Master Plan 2008. The inclusion of four mass-market residential sites in the reserve list, it says, could be insurance against a sharp upswing in sentiment.

Moreover, the lack of supply of CBD office sites should provide relief to the prime office segment and landlords, Deutsche Bank analysts say in a report. 'Muted new supply for both residential and office versus previous years should provide some relief and improve sentiment at the margin.'

Deutsche Bank analysts have pegged a 'buy' call to City Developments and Keppel Land, but add that they continue to prefer Reits over the developers.

DBS Vickers kept its 'overweight' rating on the property sector on belief that the second-half GLS programme 'does inspire confidence in the planning of land supply in Singapore, ensuring sustainable and steady growth in the property sector in the medium-term'.

Its top pick among developers is City Developments for its proxy to the residential market. It has a 'buy' call on F&N for its predominantly mass-market land bank and Allgreen for its mid-tier/mass-market exposure.

Other analysts were less sanguine. Credit Suisse analyst Tricia Song says that she continues to see negative headwinds for the Singapore property sector in the near term, given potentially rising interest rates, construction costs, supply completions and falling rents. She is keeping her 'underweight' call on the property sector, with 'underweight' ratings for City Developments and Wing Tai, but 'neutral' calls for CapitaLand, Allgreen and Keppel Land.

For Nomura, the sound supply outlook for residential units - which the Urban Redevelopment Authority estimates to be 59,545 completed units between end-2007 and end-2011 - is 'unnerving'. It hence retained its bearish stance on the residential sector where it foresees further downside pressures in asset prices from marginal speculative sellers. It has a 'neutral' rating on City Developments and Keppel Land and a 'reduce' rating on CapitaLand.

Government Releases Eight Confirmed Sites For Sale

Source : Channel NewsAsia, 19 June 2008

Capitol Centre at Stamford Road may be demolished to make way for a new hotel to meet demand for hotel rooms. The location is one of eight confirmed sites that have been released for sale, under the Government's Land Sales programme.

The Ministry of National Development also announced on Thursday that it will release enough land to potentially build nearly 8,000 private residential units, in the second half of the year.

Meanwhile, Capitol Building, Capitol Theatre as well as Stamford House have been gazetted for conservation. The Urban Redevelopment Authority said the sale of the site they are on, will not only facilitate the restoration of the conserved buildings, but also add vibrancy to the area.

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All in, a 1.45 hectare land parcel at the corner of North Bridge and Stamford Roads will be released under the confirmed list of the government land sales programme for the second half.

The successful bidder has the option to demolish Capitol Centre to build new and higher-yielding properties.

These include a 600-room hotel, which will increase the number of hotel rooms in the vicinity.

Analysts expect this site to generate a lot of interest.

Nicholas Mak, Director, Consultancy & Research, Knight Frank, said: “If you look at the entire area, I think it is located in a jewel of a location. The location is prime and is located very close to Raffles City, the MRT and has excellent exposure with potential re-development for one component of it, which is Capitol Centre. So, again there's a lot of imagination. It will certainly attract world class developers.

Another 100-room hotel is slated at a confirmed site at Bukit Chermin.

This is timed to coincide with the completion of the Labrador Nature and Coastal Walk in 2011.

Tay Huey Ying, Director, Research and Advisory, Colliers International, said: "This particular locality is going up very nicely into a tourist attraction as well as drawing more businesses and residents to this locality. I think the availability of this site in the GLS programme will probably generate a fair bit of interest because sites for hotel development in this locality is generally very limited."

She added that the four black and white bungalows would also add character and ambience to the hotel development.

Other sites up for sale are residential sites at Yio Chu Kang, Seletar Road, Sembawang Greenvale, New Upper Changi Road, Tanah Merah Kecil Avenue,
Punggol Field, Punggol Road which is marked for the building of executive condominiums

Although the site at Yio Chu Kang, Seletar Road will have commercial activities, property analysts are not expecting developers to bite

The latest programme also includes two new sites which will transform the Jurong Lake District and Kallang Riverside into a destination for work, life and play. - CNA/vm

Fewer Confirmed Govt Sites Put Up For Sale

Source : The Straits Times, June 20, 2008

Only eight sites for outright sale; move follows poor sales in first half of year

THE Government is cutting back on the number of development sites being released for outright sale over the next six months.

The move follows poor sales of the 37 sites that have been available since the start of the year.











Only five sites on the confirmed list have been sold while four other plots have yet to be sold or launched.

None of the 26 sites on the reserve list has been put up for tender. These sites go on sale only if a developer makes a minimum bid.

The Government decided not to award one residential site as the bids were too low, and it withdrew an unsold hotel plot in Race Course Road after it failed to attract an offer.

CBRE Research executive director Li Hiaw Ho said: 'Given the (economic) uncertainty, the Government appears to be responding to feedback by allowing developers to decide on the pace of development through the reserve list.'

Even with the reduced number of new sites for the second half, developers will still have a wide choice.

In addition to the 13 new sites, there will be 27 carried over from the first half of the year. Of this batch of 40 plots, eight are on the confirmed list, with the rest on reserve.

'The existing supply is more than adequate to meet the market's medium-term needs and to address the Government's concern about supply,' said a developer.

'In such a volatile and uncertain market, force-feeding the market with a large, confirmed list may create opportunistic bids that are not indicative of true values.'

Chesterton International's head of research and consultancy, Mr Colin Tan, said the Government is forcing developers to be more reasonable with their pricing by pushing out sites on the confirmed list.

'While the overall numbers do suggest there is a good chance of a glut occurring, there are also pockets of pent-up residential demand, especially among owner-occupiers.'

If all the residential sites stay on the reserve list, developers can opt not to bid. But with no cheaper alternatives in the pipeline, homebuyers may have to stretch themselves and fork out the premiums demanded by developers, said Mr Tan.

There are 21 residential sites for sale, similar to the first six months, but just four are on the confirmed list. There were eight in the first half of the year.

There are some prime sites on the reserve list, including at Serangoon Avenue and Dakota Crescent, which are near new MRT stations.

Ms Tay Huey Ying of Colliers International said: 'Despite the attractiveness of these sites, they may not be triggered for sale in view of the subdued sentiment.'

But Mr Nicholas Mak, Knight Frank's director of research and consultancy, said the reserve list sites will help to ensure flexibility in the sales programme if the market picks up later this year.

Govt Offers Fewer Confirmed Sale Sites In Uncertain Mkt

Source : The Straits Times, June 19, 2008

THE Government is cutting back on the number of development sites being releasing for outright sale over the next six months.

Its move follows poor sales of the 37 sites that have been available since the start of the this year.

Only five sites on the confirmed list have been sold while four other plots on this list have yet to be sold or launched.

None of the 26 sites on the reserve list have been triggered for tender.

These sites go on sale only if a developer makes a minimum bid.

Read the full story in Friday's edition of The Straits Times.

Govt To Offer 13 New Land Sites In Second Half

Source : The Straits Times, June 19, 2008

THIRTEEN new sites have been added to the Government Land Sale (GLS) programme in the second half, adding more homes, hotels and office space to meet an expected increase in demand and a surge in tourist arrivals.

The new parcels comprise six residential, three commercial, three hotel and one white sites, said the Urban Redevelopment Authority (URA) in a statement on Thursday.

Together with another 27 unsold sites from the first half year and which will be carried forward, they will produce 400,000 square meters of commercial space and as many as 7,960 homes and 5,750 hotel rooms,

This means that there will be 40 sites comprising 21 residential, six commercial, 11 hotel and two white sites in the second half year.

'The total supply has been assessed to be sufficient to meet the demand for the various types of properties over the medium term,' said the URA statement.

Home prices and office rents in Singapore are cooling after rising to records last year, as a global credit squeeze damped economic growth this year.

High prices had prompted developers to tear down old apartment blocks at a record pace last year, and most of the new homes will be built in 2010 and 2011.

As many as 56,500 homes and 1.1 million square meters of office space will be finished by 2011, according to the URA data.

Most of the new supply for offices will be completed in the next two to three years, the ministry said.

Singapore expects the number of tourists to reach 17 million in 2015 from 10.3 million last year with new attractions such as the two integrated resorts.

Plans To Improve Urban Spaces

Source : The Business Times, 29 May 2008

CHUA YANG LIANG gives an overview of the proposals in the Draft Master Plan 2008 and presents a wish list to planners

BESIDES the three strategic commercial hubs of Jurong Lake District, Kallang Riverside and Paya Lebar Central, which will strengthen the CBD alongside with development plans for Tanjong Pajar and the Beach Road/Ophir-Rochor corridor, there were no major changes or surprises to the zoning, plot ratio and planning directions in the 2008 Draft Master Plan. This observation is based on our brief review of three areas in particular - Buona Vista, Paya Lebar, and Harbourfront (which includes Telok Blangah) that will house the interchanges of two major transit lines (existing and the future Circle Line).













The 2008 Draft Master Plan maintains the time-tested planning vision that focuses on improving the overall quality of life, supported by a pro-business environment. It maintains the central planning philosophy found in the 2003 Master Plan - that of improving the quality of urban spaces and supporting general economic growth. This vision is inherent within the four key thrusts of 'home of choice, magnet for business, exciting playground, and home to cherish' and the zoning maps that developed from there.

Market trends

This planning deliverable is a highly practical one and focuses on concretising market trends that are conducive to improving the quality of living spaces and favourable to the overall business environment in Singapore.

The 2008 Draft Master Plan has not only respected the organic development trends, such as supporting the interim uses of vacant government buildings and sites, for example, Dempsey Road and Wessex Estates, it has also formally accepted and recognised other key market forces that would help improve the overall quality of living in Singapore. For example, a notable change in Buona Vista was the re-zoning of a popular area in Holland Village from 'Residential with commercial at first storey only' and 'Commercial and Residential' to purely commercial use.

The continual agglomeration of retail and commerce activities in this neighbourhood over the past few years has permitted retail activities to reach a threshold level thereby strengthening the area's image and attractiveness as an F&B neighbourhood that is well patronised by foreigners and young locals. Coupled with the upcoming Holland Village MRT station and the one-north intellectual cluster located slightly further south, re-zoning to permit full commercial activities within this area is practical and will further enhance the overall quality of living in and around the immediate vicinity.

Similarly, taking its cue from current market trends, the 2008 Draft Master Plan has also proposed more housing in key areas where demand has been strongest. The urban planners have proposed an additional 300,000-plus housing units (both private and public) islandwide with an emphasis on 'water-fronting'. This is similar to that proposed in the 2003 Master Plan where over 300,000 housing units were also suggested.

The largest increase is in the central and north-east regions where some 39 per cent and 38 per cent of additional housing units (over the existing stock) have been proposed. Likewise, in terms of the distribution of total new supply, the central and north-east regions again topped the list at 40 per cent and 24 per cent respectively. This can be expected given the strong residential demand as reflected in the recent surge in property values in these regions. This proposed new supply should help ease the values in these areas in the longer term horizon.

Echoing this trend is Buona Vista, which witnessed several residential sites being introduced. A site in Holland Drive, which was previously zoned for a civic and community institution, was re-zoned as a residential site with a plot ratio of 4.2, while sites at Slim Barracks Rise and Dover Close East, which were initially zoned white, are now zoned residential. The re-zoning of these three sites will support the area's growing prestige as an education and research hub in Singapore.

For the other planning regions, new housing has been proposed around existing water bodies, for example, reservoirs in Bedok and Lower Seletar, and the proposed 4.2 km waterway in Punggol. This concept of urbanising Singapore's waterways is not new but it has been given a greater push with the strong market response to developments in the Sentosa and Harbourfront area over the past two years. This emphasis on providing more waterfront homes would greatly enhance social equity by making such homes more affordable to the regular guy on the street and not just limited to the affluent.

Shifts in preferences

However, the danger of following market trends is sudden shifts in preferences. Just like dark undercurrents are a result of changing tides, a sudden turn in market preference may send urban plans out of orbit. The secret is providing sufficient free play to accommodate such shifts. In line with the evolving landscape of Buona Vista as an R&D and education hub, a site next to Buona Vista MRT station, which was initially zoned commercial, has been re-zoned White. This gives the future developer more flexibility in its development, providing the free play that could potentially eliminate any shifts in market preferences and possibly enhance the area further.

Likewise, the Harbourfront has seen a similar trend in providing more 'planning flexibility'. Notable changes in the region were the shift in sites at Telok Blangah Road that were initially zoned 'Subject to detailed planning - Residential' to 'Reserve' sites.

The 'planning flexibility' in this instance is not accorded to the private market but given to the statutory planners. The 'Reserve' zone effectively buys the planners some extra time to evaluate and deliberate on the optimal land use zones on these sites.

This shift in zoning could also be a reflection of the evolving market dynamism in the area, i.e. the shift in demographic profile in the surrounding neighbourhood, particularly in light of current developments such as Resorts World at Sentosa, Reflections at Keppel Bay, VivoCity and the HarbourFront offices.

Coupled with the government announcing its intention to create a leisure and recreational destination along the Southern Ridges by introducing a 2.2 km linear park along the Southern Ridges Park, this could potentially be an indication of future alternative plans for the area other than simply residential. Whatever the intention, we do know that the statutory planners are deliberating on the potential uses and are not ready to disclose the plans for these areas as yet.

Urban sustainability

While the 2008 Draft Master Plan has clearly articulated the medium-term planning objectives, it could be further enhanced with an expression of how our statutory planners perceive and support the issue of environmentalism, particularly on the concept of urban sustainability, which stems from greater environmental awareness today. Increasingly, we have seen more private occupiers demanding, and developers providing, environmentally friendlier buildings.

Urban sustainability is more than just green buildings; it contains the same basic principles of social, economic and environmental sustainability but applied to a bigger spatial context, i.e. the urban conurbation in which sub-systems such as transportation, housing, retail, education and tourism should be duly considered.

We have the first ever Leisure Plan that would see to the tripling of existing park connectors, providing residents 150 km of round-island access 24 hours a day. Could we see an Urban Sustainability Plan that sets the targets, deliverables and specific actions of each sub-system, all towards a sustainable urban environment?

The writer is the head of research, South-east Asia and Singapore, Jones Lang LaSalle