Further cut of private housing land expected Property consultants expect the government to continue scaling back the supply of private housing land on the confirmed list for the first half of next year, given weak housing sales and the ongoing ramp-up in completions that is pushing up vacancies. Expectations are also running high that the Ministry of National Development (MND) will release at least one office site through the confirmed list in the upcoming Government Land Sales (GLS) Programme for H1 2015, to ensure there is sufficient supply of office space post-2018. However, while some say such a site is likely to be in the suburbs in line with the strategic planning intent of developing regional commercial centres outside the city such as in Paya Lebar, Jurong East and Woodlands, others think a CBD office site would be a better choice. Most property consultants said the authorities are likely to continue keeping away from releasing hotel land - given weak visitor arrival numbers, as well as to avoid aggravating the ongoing labour shortage. Some analysts also used the labour crunch argument, along with traffic congestion woes, to support their view that the government will ease up on land specifically for shopping centre development. Moreover, there is stiff competition from e-retailing and vacancy rates for retail space are increasing. One analyst expects to see more mixed-use development sites adjoining or near MRT stations and transport hubs to optimise land use, or white sites on which a range of uses are permitted. This would allow developers to conceptualise the appropriate use for the site according to their reading of the various segments of the Singapore property market. As for private housing land, a market watcher said that the period of supplying sufficient land to meet the pent-up demand arising from the large population growth between 2007 and 2009 is over. Now the state is likely to be looking at maintaining sufficient new supply to meet the long-term housing need, i.e. from new household formation. For the private residential market, the general undersupply situation has been resolved and thus the GLS Programme may reflect a more sedentary pace in line with demographic trends. MND has trimmed the supply of land for private homes (including executive condominiums) on the confirmed list of its half-yearly GLS Programme from about 8,100 units for each of the H2 2010, H1 and H2 2011 lists to around 7,000 units for each of the H1 and H2 2012, and H1 2013 programmes before clipping the quantum further to around 6,000 units for H2 2013, 4,630 units in the first half of this year and 3,915 units in the current H2 slate. Property consultants projections for the H1 2015 confirmed list supply range from 1,900 units to around 3,700 units. The government launches sites on the confirmed list according to schedule, regardless of demand. On the reserve list - where sites are launched only upon successful application by a developer - land for around 6,000-7,000 private homes, including executive condominiums (ECs), is likely to be released, according to market watchers who spoke to BT. This would be close to the 6,305-unit supply in the H2 2014 reserve list which acts as a buffer in case there is a pick-up in demand. Consultants expect new private housing (including EC) sites to be unveiled in growth areas such as Jurong Lake District, Woodlands and Punggol (the last two are part of the vision for the North Coast Innovation Corridor), Sengkang and possibly the Seletar Farmway area. One market watcher said that we could also see the first site from the Bidadari area being added to the reserve list. Pprivate housing sites in older estates where there is sufficient infrastructure - such as Queenstown, Bedok, Clementi, Hougang and Bukit Batok - may also surface on the next-half GLS slate. This would help regenerate these areas and avoid urban decline. For ECs (a public-private housing hybrid), many suburban areas - Punggol, Sengkang, Pasir Ris, Woodlands, Yishun, Sembawang and Choa Chu Kang - already have EC projects and have soaked up substantial demand for this housing form. Another market watcher said that there is potential to release more EC sites in Jurong since the area is fast rejuvenating, and given the near sell-out of Lake Life at its recent launch. Market watchers expect a supply of only 500 EC units in the confirmed list for H1 2015, one-third of the 1,520 EC units supply in the same list for H2 2014. The EC land supply on the confirmed list could be trimmed 30-35 per cent to around 1,000 units, given the increasing vacancy rate seen in newly completed EC projects in recent months, among other factors. For retail space, despite flat retail sales and labour constraints ranking high in the litany of worries for tenants, there is still room for suburban malls. With rents still being high for retail and food & beverage operators at most well-located Orchard Road and suburban malls, the current dissatisfaction by these operators in the public sphere might prompt the government to inject fresh retail supply as part of the mix for commercial sites in order to ease occupational costs for retail start-ups and expansions. For office supply, one analyst tipped Buona Vista as a likely location for a site on the confirmed list, given the success of Ho Bees The Metropolis office development in attracting multinational corporations to the area. Another analyst suggested Woodlands; considering that the planners have focused a substantial portion of the regenerative effort around Jurong of late, the missing piece in the puzzle is Woodlands. However, some industry players think it may take some time before Woodlands takes off as an office location. Currently there are two sites for office development on the reserve list - a plot along Marina View (behind the V on Shenton project) and a land parcel on Beach Road (that includes the former police station). The latter was made available for application just last week and is hence likely to remain on the reserve list for H1 2015. However, there is a fairly strong chance that the Marina View plot could be moved to the confirmed list to ensure that there will be a continuous supply of prime office space in the CBD that will be made available beyond 2018. The office components of the two big M+S projects - Marina One and Duo - are slated for completion in 2017. Another analyst thinks that the Marina View site is likely to remain on the reserve list as the quantum is large. A lack of interest if it were to be put on the confirmed list may erode confidence. This year, MND has not released any land specifically for hotel development. There could be room for one to two mid-sized hotel plots. There may be a case for the authorities to release land selectively for three to four-star hotels to align with changing demand of business and leisure travellers. Adapted from: The Business Times, 1 Dec 2014
Posted on: Mon, 01 Dec 2014 07:05:02 +0000
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