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News Release

Singapore

JLL News Flash | Release of 2H17 government land sales (GLS) programme


​​Release of 2H17 government land sales (GLS) programme 



Residential

Mr. Ong Teck Hui, National Director, Research & Consultancy

王德辉, 新加坡董事


"An Overview of the 2H17 GLS Programme


It is a conservative programme in terms of private residential land supply where the planned quantum of 2,025 private residential units in the confirmed list for 2H17 is 13% lower than the 2,330 units in 1H17. Given the demand crunch for residential sites, developers could be steered towards triggering sites on the reserve list as well as sourcing from the collective sales market.


The reserve list private residential supply has been upped quite significantly by 21% from 4,360 units (6 sites) in 1H17 to 5,285 units (9 sites) in 2H17, providing a wider choice to developers for triggering sites on the list. The collective sales market has been buoyant in the first half of 2017, registering $1.52 billion in transactions, surpassing the $1.05 billion for the whole of 2016 as developers were prepared to resort to collective sale sites due to limited sites on the GLS programme.


Land supply for EC has resumed in 2H17 after a hiatus since 2H16, with a single site that can generate 815 units. This is seen as providing continuity to new EC supply as there are only two EC sites left on the launch pipeline - Hundred Palms which is being launched soon and the parcel at Anchorvale Lane. Demand for new ECs has picked up with 3,999 units sold in 2016, nearly 57% higher than in 2015. In 1Q17, 1,072 new ECs were sold, against 1,024 units launched.



The Most Attractive Sites


The most attractive sites on the confirmed list are the Holland Road and Sengkang Central parcels, both mixed development sites with residential and commercial uses allowed. 


Riding on the popularity of Holland Village as an eating and niche shopping destination as well as demand for homes in that area, the Holland Road site could be the most appealing site to developers. Proximity to the Holland Village MRT station is an added boost to the site, enhancing its accessibility and connectivity advantages. Strong interest is expected in the tender for this site.


Of the three end stations on the NEL, mixed developments have been developed to capitalize on two of the stations ie Watertown at Punggol MRT stations and Compass One at Sengkang MRT station. The Buangkok MRT station would soon synergize with the tender and development of the Sengkang Central site with its residential units, commercial outlets and integrated community and bus interchange facilities. Due to this, we can expect keen interest from developers in bidding for the site.


The Handy Road residential site would be popular by virtue of its prime location, just off Orchard Road, enjoying abundant amenities nearby and proximity to the Dhoby Ghaut MRT station.



The Other Sites 


The Hillview Rise parcel is located in the popular Hillview “condominium belt”, within easy reach from Hillview MRT station on the Downtown line. It is an attractive suburban residential site that should interest a good number of developers.


The Chong Kuo site is surrounded by other developments and is not near any MRT station, although public transport is available on Sembawang Road. It is a mediocre site but being a smallish site, the low absolute land price would lower the bidding barrier, possibly attracting many bidders.


Located at Sumang Walk, the EC site is in a heartland location, near Nibong and Sumang LRT stations, but a bit of a distance from Punggol MRT station. However since there has been no new EC site in the GLS for a year, and with healthy EC demand, we should see encouraging participation in the tender for the site.



Surprise on the Reserve List 


It is a surprise that a very prime residential site is being included in the reserve list. The Cuscaden Road parcel is the most attractive on the reserve list and could be made available due to improved sentiments and interest in the prime residential segment. High-end prime residential transactions have picked up over the last year with growing confidence level in this market segment."



Commercial

Ms. Tay Huey Ying, Head of Research & Consultancy, Singapore

郑惠匀, 研究与咨询部主管 (新加坡)


"Office Development Sites Remain Obscure In Spite of Improving Market Sentiment


The Government is likely of the view that the current pipeline supply of office space is sufficient to meet demand, thereby leading to its decision to continue to omit sites for office development in the confirmed list in spite of the improving market sentiment that has culminated in the triggering of two reserved list sites with predominant office components since August last year.  The Beach Road site was triggered for sale last week while the Central Boulevard white site was triggered in August 2016 and successfully sold in November 2016.  Including these two sites, more than 9 million sq ft of office space is expected to come on stream between 2017 and 2022, averaging more than 1.5 million sq ft per annum.  This is still above the 10-year average islandwide net absorption of 1.1 million sq ft based on statistics from the Urban Redevelopment Authority’s Real Estate Information System (REALIS).  


We are of the view that more decentralized office sites should be included in the reserve list for developers to trigger to cater to demand in the event that the market recovers at a pace that is stronger than expected and avoid a repeat of the 2006-2007 supply crunch wherein rents escalated at runaway pace.   


With the stock of decentralized Grade A office space standing at a mere 10% of the Grade A CBD stock as of end-2016, there is room to raise the supply of the former to provide businesses with a wider variety of business location options at varying price points. At the same time, this can help to alleviate congestion and relieve pressure on the supporting infrastructure of the Central Business District."