Singapore Property: Supply spike to tame land price hikes
- URA will increase supply on the confirmed list in the 2H22 GLS programme by 25% vs 1H22, catering to needs of developers with an aim to tame rising land prices
- Marina Gardens site to kickstart the redevelopment of Marina South, a plump site that would attract developers’ interest
- Mixed use site at Tampines Ave 11 a potential focal point for ongoing rejuvenation of Tampines area
- Lentor a potential “new town” as sites collectively may yield up to 2,950 units when launched
What’s New
The Urban Redevelopment Authority (“URA”) has released the 2H2022 government land sales (“GLS”) programme. This comprises of six confirmed list sites and eight reserve list sites. Overall, the 2H22 GLS sites can yield a total of 7,310 private residential units, 94,750 sqm GFA of commercial space and 530 hotel rooms.
Our views:
(+) Tweak in housing supply to a 5-year high to cater for robust property demand to be viewed positively to taper the increase in land prices. The government has increased the supply for the 2H22 GLS programme with the confirmed list yielding 3,505 units over six sites. This is a 25% increase in supply of units compared to 1H22. In total for 2022, the government has increased supply by close to 80% compared to 2021 and total GLS sites in the confirmed list in 2022 can yield 6,290 units, one of the highest since 2014.
One of the bigger sites within the confirmed list is a mixed-use development at Tampines Avenue 1 which can potentially yield close to 1,190 units (150k sqft of retail). The site is nestled within the public housing development (“HDB”) in the vicinity, implying that any mixed-use development will serve a strong captive population of new households moving into the locality over time.
Overall, we see good sites available on the GLS that will pique developers’ interest; and, together with planned collective sales, we see the increase in supply to be positive in tapering the price increase in land bids from developers over time.
(+) Kickstarting the development of Marina South! The government has put a first site in Marina South for sale in the confirmed list. The Marina Gardens site is expected to yield close to 795 units, signalling the start of the planned redevelopment of Marina South precinct. This site is located at the edge of Gardens by the Bay and will likely be viewed as a very tempting site for developers.
(+) Lentor area seeing more supply! We noted that the government has put another site at Lentor (Lentor Gardens site that may yield 530 units) on the confirmed list. Together with 2 sites already awarded to Guocoland (Lentor Central and Lentor Hills Road Parcel A) and 3 currently available for sale, Lentor could see up to c.2,950 units for sale in the coming years.