June 27, 2018
Ms. Tricia Song, Head of Research for Singapore, Colliers International:
“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. 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.
The number of sites offered in H2 is the same as H1 2018 at six Confirmed List sites and nine Reserve List sites. The number of private residential units that could be built is also similar to H1 2018 at 8,040 of which 2,705 are on the Confirmed List. Commercial space continues to be focused on decentralisation, with new White Sites in Woodlands and Pasir Ris added. Two Reserve List sites at Peck Seah Street and Woodlands Square that were in H1 2018 Reserve List have been removed to facilitate a review of development plans in the area.
Particularly eye-catching is the provision of a hotel site which can yield an estimated 390 rooms in Club Street under the Confirmed List. This is the first hotel site to feature in the GLS Confirmed List since the Bukit Chermin Road plot in H2 2008 land sales programme. In addition, the Government has also placed a White Site in Marina View under the Reserve List which can provide an estimated 540 hotel rooms. Colliers’ research showed that the last time hotels were included on the Reserve List was in the H2 2013 land sales programme, comprising three land parcels in: Race Course Road/Perumal Road; East Coast Road; and Havelock Road. (See further comments from Mr. Govinda Singh on hotel outlook below.)
We think several residential sites offered in GLS H2 2018 are very attractive – including the plum site in Kampong Java Road - and would appeal to both local and foreign developers judging by the strong response to the sale of prime sites on the collective sale market as well as recent GLS site tenders, such as in Fourth Avenue, Jiak Kim Street, Handy Road, and Cuscaden Road.
The other sites that stood out for us in the upcoming land sales programme are the Middle Road plot and the one in Tan Quee Lan Street on the Confirmed List and Reserve List respectively. Located near the Beach Road White Site tendered in end-2016, both sites are likely to supplement the housing demand in the up-and-coming Beach Road commercial enclave. Nearby DUO Residences has sold 652 units of its 660 units since its launch in 2013, achieving an average selling price of SGD2,039psf. We expect a top bid of SGD1,400-1,500 psf ppr for each site or about SGD500 million for Middle Road and SGD800 million for the Tan Quee Lan Street plot.
Given the robust demand for Executive Condos (ECs), there was perhaps an expectation that the Government would place more EC sites in GLS H2 2018, possibly under the Reserve List. However, this was not to be. In fact, there was no new EC sites this time. The only EC plot to feature in the Confirmed List – Tampines Ave 10 - was brought over from the Reserve List of GLS H1 2018. We also expect the Anchorvale Crescent EC site in the Reserve List to be triggered soon.
Taken together, we think this slate of sites will complement the collective sale market, offering a good selection of land for developers as the Government continues to work at ensuring a stable and sustainable property market.”
Mr. Govinda Singh, Executive Director of Valuation & Advisory, Asia, at Colliers International:
“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. 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.
The move to offer a hotel site on the Confirmed List (Club Street) and another White Site with a hotel component in the Reserve List (Marine View) is timely, and lines up with Colliers’ view that there is a shortage of hotel rooms in Singapore amid stronger tourism growth in recent years, and even more so should Singapore meet its 20 million tourist arrivals target in 2020.
Tourist arrivals were up by 6.2% year-on-year (YOY) in 2017, and the momentum has carried over to this year. Visitor arrivals between January and April already rose by 6.7% YOY and this does not even include the expected boost from the Trump-Kim Summit that took place in Singapore on June 12, which brought in thousands of journalists from around the world and government officials from the US and North Korea.
Given the bright tourism prospects ahead, we believe the hoteliers would be very keen on the hotel offerings on both the Confirmed List and Reserve List. The Club Street plot sits within a high demand – both corporate and leisure - area in Chinatown and plugs well into the rejuvenation of the Tanjong Pagar district nearby. The Marine View White Site also presents good opportunities being in the prime downtown, which has been earmarked as an exciting waterfront destination in the future.”