Colliers International has provided an analysis of the Government Land Sales (GLS) Programme saying there will be a conservative land supply amid slowing economic growth, substantial supply pipeline and relatively more muted demand for homes

Tricia Song, Head of Research for Singapore, Colliers International said it was expected that the government continues to keep its finger on the pulse of the property market in Singapore.

"(They are) lining up a conservative slate of land supply for the first half of 2020," said Ms Song. 

At a Glance:

• Three new sites have been placed on the Confirmed List - Yishun Avenue 9, Tanah Merah Kechil Link and Jalan Anak Bukit
• This is a total of 1,775 dwelling units and 22,000 sqm of commercial space
• It is the fewst number of sites offered in 10 years.

"This comes amid slowing economic growth, substantial pipeline of residential units, and relatively more muted demand for homes on the back of fresh cooling measures, which were implemented in July 2018." 

The Ministry of National Development (MND) announced on Tuesday this week, that it will place three new sites on the Confirmed List for the upcoming GLS – Yishun
Avenue 9 (EC), Tanah Merah Kechil Link, and Jalan Anak Bukit – which can potentially yield 1,775 dwelling units and 22,000 sq m of commercial space.

Of the three Confirmed List sites, two of them are pure residential sites (Yishun Avenue 9 (EC) and Tanah Merah Kechil Link) – the fewest number of such sites offered in the GLS in 10 years. 

Among the Confirmed List sites, we believe the Tanah Merah residential site is the most attractive, given its proximity to the MRT station, popularity of the estate, and the small palatable size. 

Given the ample supply of 39,000 units of private residential stock in the pipeline, the government has maintained a cautious approach in its GLS programme.

We believe this will help to continue to stabilise the property market, particularly given the cocktail of challenges including more subdued economic outlook, geopolitical tensions in the region, and trade uncertainties. 

In addition to the three plots on the Confirmed List, eight sites on the Reserve List in the 2H 2019 will be carried over to the Reserve List in the upcoming GLS.

These sites can offer a further 4,715 residential units, 1,070 hotel rooms, and 92,000 sq m of commercial space.

We note that two of the plots have seen a slight reduction in size: 

Kampong Bugis now has a site area of 8.29 ha compared with 9.20 ha under 2H 2019 GLS; and the hotel site in River Valley Road went from 1.07 ha to 1.02 ha and will yield 530 rooms instead of 560 under 2H 2019 GLS.

Yishun Avenue 9 (EC) 

The Yishun Avenue 9 site is located at the edge of the Yishun town, around 2km from the Yishun MRT station.

It is the newest EC site in the locality to be offered on the GLS since 2014 after The Criterion and Signature at Yishun, so there could be some pentup demand.

It is next to Symphony Suites (completed in 2018) which have transacted at SGD1,100-1,200 psf in 2019. 

Yishun Avenue 9. Image: Singapore Government.

The site is regular shaped and can be built up to 600 units.

Given its distance away from the MRT station, we expect land bids to be around SGD450 psf per plot ratio, and developers can look to potentially launch at SGD900 psf. 

Tanah Merah Kechil Link 

We think this site is probably the most attractive among the new sites as it is next to the above-ground Tanah Merah MRT station in the eastern part of Singapore, and is of a palatable size of 310 units.

It is between two completed private condominiums – Urban Vista (completed in 2012) and Optima (2012).

Tanah Merah Kechil Link. Image: Singapore Government

Meanwhile, Grandeur Park Residences, opposite the site, has sold 98% of its 720 units since launch in March 2017 as of October 2019, with the latest median price of SGD1,550 psf. 

Jalan Anak Bukit 

We think the residential and commercial plot in Jalan Anak Bukit is the most interesting. 

It is perhaps timely to offer such sites seeing the good response to recently launched residential and commercial developments such as One Holland Village and Sengkang Grand. 

It is also near Beauty World MRT station along the Downtown line.

Jalan Anak Bukit. Image: Singapore Government

However, there are more conditions attached to such sites, such as the requirement to build an integrated bus interchange (estimated 5,000 sqm GFA), up to 7,500 sq m GFA can be for retail, and the site is relatively sizable (865 residential units) which entails a relatively large land price quantum of over SGD1 billion.

One Holland Village and Sengkang Grand residential and commercial sites were awarded in May and August 2018 respectively at SGD1,888 and SGD924 psf ppr respectively. 

There are also ample new launches nearby - Daintree Residences sold 69 units and View at Kismis sold 47 units at an average price of about SGD1,700 psf as of October 2019. 

There are also existing commercial spaces available nearby such as Beauty World Centre, Beauty World Plaza, Bukit Timah Shopping Centre and Bukit Timah Plaza. 

For more information regarding the Government Land Sales, click here.

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