Another conservative GLS programme for 2H2020

Singapore rolled out another conservative Government Land Sales (GLS) Programme for 2H2020, comprising three sites on the Confirmed List and nine sites on the Reserve List.

June 26, 2020

The sites on the Confirmed List are estimated to yield approximately 755 private homes (excluding ECs). This is almost 36% less than the 1,175 units released from the 1H2020 Confirmed List and the fifth consecutive reduction in private home supply from the bi-annual GLS Confirmed List. It reflects the government’s concerns over the substantial supply of unsold units in the pipeline and the expected economic recession.

The confirmed list supply of 1,930 private residential units for the whole of 2020 is a low supply level compared with the annual supply of private homes ranging from 2,875 units to 4,355 units in the confirmed lists of the preceding five years. The 2H2020 confirmed list comprises two private residential sites at Northumberland Road and Ang Mo Kio Avenue 1 as well as one executive condominium (EC) site at Tengah Garden Walk.

The Northumberland Road parcel is just next to the Farrer Park MRT station, One Farrer Hotel and Farrer Park Hospital. Popular amenities like Mustafa Centre, City Square Mall and shops in Little India are in close proximity. There could be seven to ten bidders for this site with the top bid at around $1,000 psf/pr.

The Ang Mo Kio Avenue 1 parcel is at the edge of Ang Mo Kio Town adjacent to private and public housing. It is a short distance from the future Mayflower MRT station and opposite the popular Bishan-Ang Mo Kio Park. It is also located within 1 km from top primary schools such as Ai Tong School, CHIJ St Nicholas Girls’ School and Mayflower Primary School. Six to nine developers could bid for this site and it could fetch a top bid between $850 to $900 psf/pr.

The EC site at Tengah Walk is in a relatively less developed area but could be in fair demand due to the lack of new EC projects in the west. The last time an EC site was sold in the west was in January 2014 when the Westwood Residences land parcel was acquired by Koh Brothers & Heeton.

The Tengah Walk site could be contested by four to six bidders and the top bid could be between $480 to $520 psf/pr.

As the three sites are scheduled to be launched for tender in 4Q2020, their tender closing is likely to be in 1H2021 and project sales launch would probably be in 2022. If bidders assess that the worst of the current crisis could be over by then, we could see positive bidding for the sites. Nevertheless much depends on how the crisis unfolds in 2H2020 and early 2021 which will ultimately determine the manner of bidding when tenders for the sites close.