Ms. Tricia Song, Head of Research for Singapore, Colliers International:
The Singapore government has maintained a cautious approach to its land sales programme for the second half of 2019 (H2 2019) in view of the ample supply of housing units in the pipeline and the relatively more muted residential property market.
The upcoming GLS slate can potentially offer a total of about 6,430 private residential units (under both Confirmed and Reserve Lists) – down marginally from 6,475 units provided for in the H1 2019 GLS. We think this should be supportive of a sustainable market.
Of the 6,430 residential units, about 1,715 units (including 480 Executive Condos) from five sites will be offered under the Confirmed List – 15.3% lower than 2,025 private residential units offered under the Confirmed List of H1 2019 GLS.
Apart from the five private residential sites on the Confirmed List, GLS H2 2019 also includes eight Reserve List plots which can yield 4,715 residential units, 92,000 sqm gross floor area of commercial space and 1,100 hotel rooms.
In our view, three sites stand out in this upcoming GLS slate: Confirmed List residential site in Irwell Bank Road; and two on the Reserve List – the large white site in Kampong Bugis and hotel site in River Valley Road. Please see our observations on some of the sites below:
• Irwell Bank Road (CL / Residential)
Irwell bank road site is a rare sizeable prime residential site on the H2 2019 GLS. We expect this site to be the most attractive to developers among all the sites in the upcoming GLS slate. Besides being of regular shape and a good size that could house 445 units, it is near the upcoming Great World City MRT station and Great World City Mall. Nearby, 99-year leasehold Rivière reportedly sold 32 units over last weekend, above SGD2800 psf.
• Canberra Drive Parcel A & B (CL / Residential)
The 4.09-ha Canberra Drive, previously on the Reserve List 1H19, has been split into two parcels for sale on Confirmed List in GLS H2 2019. Parcel A and B can provide 220 and 455 units respectively, compared to 675 units for the entire site earlier, making them more palatable and attractive to a wider range of developers.
• Tampines Street 62 (RL / EC)
Tampines Street 62 EC, the only new addition to residential sites on the Reserve List, while not near any MRT, could still see some interest. The last EC plot in Tampines/Pasir Ris was the Tampines Ave 10 EC site which was awarded in January 2019 for SGD578 psf ppr to Hoi Hup/Sunway JV – beating six other bidders.
• Kampong Bugis (RL / White)
Kampong Bugis should be attractive to a large developer or a consortium of developers as it offers a rare opportunity to plan and create an urban ecosystem, over a long term.
• River Valley Road (RL / Hotel)
This site is in a prime location and should be appealing to developers amid brighter tourism prospects. (Please refer to additional comments below from Govinda Singh). This hotel plot replaced the Sims Avenue hotel site (575 rooms), which has been removed from the GLS Programme.
Mr. Govinda Singh, Executive Director of Valuation and Advisory Services, Colliers International:
The site presents a good opportunity to fully establish the Fort Canning area as a major tourist destination, creating additional footfall to Clarke Quay and surrounds, whilst being part of the Singapore River rejuvenation story. At potentially 560 rooms, this will be a significant project and we would envisage a developer, given the likely land price, to position this more towards the mid-market and/or below segments. Having said that, indeed given the potential size, in addition, a smaller lifestyle property could also be added to enhance the overall development. This will create three value propositions, targeting a wider audience, all of whom have been the main drivers of growth in tourism arrivals in Singapore.