SINGAPORE – Land supply for private housing and commercial offices in the first half of 2023 has been bumped up significantly. This includes the upcoming launch of a 6.8ha site in Jurong Lake District to support business needs and decentralise development outside the city centre.
The number of private homes offered on the confirmed list for the first half of 2023 has risen to its highest level since the first half of 2014. However, the pace of growth has moderated in the face of the latest cooling measures and a potential economic slowdown next year. Meanwhile, land supply for offices has seen the biggest increase since 2016.
Seven sites on the confirmed list of the government land sales (GLS) programme announced by the Ministry of National Development on Thursday will yield about 4,090 units. This is a rise of 16.7 per cent from 3,505 units in the second half of 2022.
The supply has been going up steadily. There were 2,000 units on the confirmed list in the second half of 2021, and 2,785 units in the first half of 2022. In other words, the first two halves of 2022 recorded rises of 39.3 per cent and 25.9 per cent over the previous six months, meaning that the rate of increase has moderated, noted Mr Nicholas Mak, ERA Realty’s head of research and consultancy.
Among the confirmed list sites are two white sites – intended for a mixed-use residential and commercial development – in Jurong Lake District and Marina Gardens Crescent in Marina South. There is also an executive condominium (EC) site in Tampines near the new Tenet EC in Tampines Street 62 which should meet pent-up demand from HDB upgraders, said Mr Steven Tan, chief executive of OrangeTee & Tie.
In all, the seven sites can yield 4,090 private residential units, including 700 EC units, and 106,400 sq m of gross floor area (GFA) of commercial space.
This means there will be a total supply of about 65,000 private homes, including ECs, in the pipeline. These comprise 55,100 units with planning approval and 9,900 units from GLS sites and awarded en bloc sites that have not yet been granted planning approval.
Of these, about 33,600 units will be completed in the next two years, 192 per cent more than the 11,500 units built since 2021.
Calling the latest GLS programme a game changer, Mr Lam Chern Woon, head of research and consulting at Edmund Tie, noted that four new sites on the confirmed list are in the suburbs, which aims to support decentralisation. These include two sites at Champions Way in Woodlands and Media Circle in one-north.
Ms Chia Siew Chuin, JLL’s head of residential research, noted that the land cost of the Marina Gardens Crescent site will likely be high and could limit bidding. Given the sizable quantum, potential bidders are likely to form joint ventures in order to leverage resources, she said.
Meanwhile, a 6.8ha white site – equivalent to nine football fields – in Jurong Lake District will kick-start the next phase of development in the area. It comprises three plots of land linking the Jurong East MRT interchange station and the future Jurong Lake District station.
With a potential yield of about 150,000 sq m of office space, 1,760 private residential units and 75,000 sq m GFA for retail, hotel or community use, the proposed integrated project will be developed over the next five to 10 years.
The developer will be required to build at least 70,000 sq m GFA of office space and 600 private housing units as part of the first phase of the development, but will have some flexibility to phase out the remaining supply according to market demand, the URA said.
Jurong Lake District will be progressively developed into Singapore’s largest business district outside the city centre to cater to business needs and support decentralisation. It will be a model sustainability district with a goal to achieve net-zero emissions for new developments around 2045, the URA said.
Ms Tricia Song, CBRE’s head of research for South-east Asia, estimates the development land cost to be at least $1,300 per sq ft per plot ratio. “The sheer size of the project could mean over $2 billion in land cost, and we expect developers to form consortiums or JVs to tender for this project,” she said. She expects the offices to be completed in 2028 at the earliest.
Mr Ismail Gafoor, chief executive of PropNex Realty, said he had hoped for more confirmed list supply in the suburbs due to a “sharper supply and demand imbalance” in this submarket.
“As of Q3 2022, there were just 3,417 unsold uncompleted units (excluding EC) in the suburbs – way below the annual average new home sales of about 6,600 suburban units between 2011 and 2021. We think a larger injection of housing supply in the suburbs could help to keep prices stable,” Mr Gafoor added.
Meanwhile, the Government will also make available six private residential sites (including two EC sites), one commercial site, one white site and one hotel site on the reserve list. Unlike confirmed list sites, these sites are triggered for sale only if developers show sufficient interest. The reserve list sites can yield an additional 3,625 private residential units (including 855 EC units), 93,350 sq m GFA of commercial space and 530 hotel rooms.
Among the reserve list sites, the Lorong 1 Toa Payoh site is the most likely to be triggered because there have been no new private residential launches in this mature estate for years, Mr Mak said. The last project launched in Toa Payoh was Gem Residences in 2016.
A short-term 30-year lease tenure site in Punggol Walk in the reserve list could test demand for workspaces near home. But JLL’s head of research and consultancy for Singapore, Ms Tay Huey Ying, said the site may not be triggered for launch in 2023 “unless the economy surprises with a V-shape recovery”.
“Source:[Govt steps up supply of private homes, offices for first half of 2023; includes mega Jurong Lake District site] © Singapore Press Holdings Limited. Permission required for reproduction”