Singapore residential land-banking options

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Singapore residential land-banking options

July 14, 2017 / By Doreen Goh

The robust demand for private residential homes has led to dwindling unsold inventory, but worked up developers’ appetite for land. We observe this via aggressive bids and the high participation levels at recent residential state land tenders in 1H17 including for Toh Tuck Road, Stirling Road and Perumal Road, which attracted 24, 13 and 11 bidders, respectively.

Yet, the much-awaited 2H17 Government Land Sales (GLS) Programme announced on 29 June 2017 has land provision for only 2,025 private residential units (excluding executive condominiums) on its Confirmed List, down from 1H17’s confirmed land supply for 2,330 units. The Confirmed List comprises sites which will definitely be launched for tender at pre-determined dates.

Faced with a conservative confirmed GLS land pipeline, what other land-banking options do residential developers have?

More options on the 2H17 GLS Reserve List

One possibility would be to consider GLS sites that have been placed on the Reserve List. These are sites that will be launched for tender only when a developer submits an application with a minimum price bid that is accepted by the government.

While the 2H17 GLS Confirmed List might comprise fewer land parcels for private residential development than six months earlier, the government has upped the supply of private residential land on the 2H17 Reserve List.

Specifically, nine parcels that could yield 5,285 private residential units were placed on the 2H17 GLS Reserve List, compared to the six sites that could generate 4,360 units on the 1H17 Reserve List.

Notably, the 2H17 Reserve List includes sites in attractive locations such as Cuscaden Road in the Orchard locality and Jiak Kim Street along the Singapore River.

Collective sales opportunities in the private sector

Additionally, there are many opportunities for developers to acquire residential development or redevelopment sites in the private sector, especially via collective sales where owners of individual homes in a development collectively agree to sell their properties to one single buyer.

These sites, which are typically of freehold land titles – as compared to GLS sites which are of 99-year leasehold tenure – offer a myriad of locations, land sizes and development potential to meet the needs of different developers.

Collective sale sites already launched for tender include The Albracca, Serangoon Ville and Tampines Court. And there are many other potential sites in various stages of the collective sales process that developers could watch out for. Examples include Amber Park, Boon Teck Tower, Brookvale Park Condominium and Gilstead Court.

However, some of these potential sites may take a while before being launched for tender, while the launch of other sites may not materialise for reasons such as the failure to achieve the minimum statutory consensus from owners.

Still, there is undoubtedly a wide array of land-banking options in both the public and private sectors for developers racing to top up their depleting land-banks in the wake of improving market sentiment.

How this race eventually pans out will be an interesting one to watch.

Table: Examples of Upcoming Collective Sales
Source: JLL