SINGAPORE - In a move that could boost flagging developer participation in state land tenders, more private housing sites have been introduced in the first-half 2024 Government Land Sales (GLS) programme in areas that have not seen such tenders for decades.

Sites in areas such as Bayshore and Tampines Street 94 are therefore likely to enjoy pent-up demand.

The list also includes more sites for a new class of long-stay serviced apartments in one-north and River Valley Green, which some analysts say could help diversify development risk.

Developer participation in GLS tenders has dropped noticeably in the past six months, in the face of heightened economic uncertainty, elevated interest rates and the April 2023 round of cooling measures that raised additional buyer’s stamp duty (ABSD) rates, among other things.

Excluding executive condominium (EC) plots, private residential sites received 3.7 bids per site in the second half of 2023, down from an average of 5.2 bids per site in the first half of 2022, ERA Singapore noted.

The property agency expects a further dilution of bids with 10 confirmed list sites slated for release in the first half of 2024.

The 10 sites will supply 5,450 private housing units in total, including ECs – the seventh straight half-yearly increase in supply since the first half of 2021.

JLL’s head of residential research for Singapore, Ms Chia Siew Chuin, noted, however, that the increase in private housing supply has moderated to 5.6 per cent in the first half of 2024.

In comparison, such supply in the second half of 2023 jumped 26.2 per cent from the first half of 2023.

Excluding ECs, the supply is up just 3 per cent from the second half of 2023, Ms Chia said.

The moderation in supply means that there is still sufficient land being offered for private housing, yet at the same time, the market is not being oversaturated.

Also notable is the absence of new commercial or hotel supply in the first-half 2024 GLS list, ahead of the tender closing in March 2024 of a mega 6.5ha white site in Jurong Lake District – Singapore’s second Central Business District.

The white site for a mixed-use development in Woodlands Avenue 2, a short-term lease commercial site in Punggol Walk, and a hotel site in River Valley Road were carried over from the second-half 2023 reserve list to the first-half 2024 reserve list, CBRE noted.

Developers can bid to trigger reserve list sites for development if they assess there is demand.

The distribution of confirmed list housing supply is the highest in the suburbs with 3,060 units, up nearly 18 per cent from 2,595 units in the second half of 2023, to cater to local demand, JLL noted. In second place is the city fringe with 1,330 units.

Confirmed list supply in the prime district also rose from 270 units in the second half of 2023 to 1,060 units in the first half of 2024.

This “creates an opportunity for developers to landbank in the prime district via GLS, given the persistent mismatch in price expectations between developers and sellers” in the collective sales market, Ms Chia said.

Mr Wong Xian Yang, Cushman & Wakefield’s head of research for Singapore and South-east Asia, said the increase in GLS confirmed-list supply could mean an even more subdued private residential collective sales market in the suburbs and city fringe.

But developers seeking smaller plots may still turn to the collective sales market because six of the 10 confirmed-list sites are mid- to large sites of more than 500 units, and may be out of reach for smaller players, he added.

The first-half 2024 confirmed list includes a Media Circle site in one-north that is stipulated for long-stay serviced apartment use.

This means that developers are not under the gun to complete selling the project within five years to obtain remission for ABSD, said Mr Leonard Tay, head of research with Knight Frank.

Another site on the reserve list – River Valley Green (parcel B) – can yield 220 long-stay serviced apartments out of a total of 575 dwelling units.

Mr Tay said the inclusion of serviced apartments mitigates developers’ risk of incurring ABSD, lowering the number of units the successful tenderer needs to sell in order to obtain the remissible ABSD.

Of the nine sites on the first-half 2024 reserve list that can yield an additional 3,460 units, Mr Tay said the River Valley Green site, along with the Bayshore Road plot, will have the best chance of being triggered for sale. 

As the last two GLS tenders in Bayshore – now The Bayshore and Costa Del Sol – were more than two decades ago, developers and home buyers may seek first-mover advantage by buying into the first private housing site to be sold in the new Bayshore estate.

But Ms Tricia Song, CBRE’s head of research for Singapore and South-east Asia, does not expect the Bayshore Road site to be triggered in the next six months, given ample supply on the confirmed list.

A case in point is the Margaret Drive site in Queenstown, which can yield 460 units and is expected to attract keen interest, given a lack of new launches in the vicinity and potential demand from HDB flat upgraders.

The last project launched in the area was Margaret Ville in 2018.

Another site that is likely to garner strong interest is the sole EC plot on the confirmed list – Jalan Loyang Besar in Pasir Ris.

This site is located near Pasir Ris MRT station and shopping centres such as Pasir Ris Mall and White Sands, and there has not been a new EC launch in the area since Sea Horizon in 2012.

PropNex Realty chief executive Ismail Gafoor said industry observers had hoped that at least one more EC plot would be offered in the confirmed list, given the popularity of this hybrid private-public housing type that has resulted in aggressive bidding for such plots in recent GLS tenders.

New record land rates for EC plots are continually being set.

The latest one at $721 per sq ft per plot ratio (psf ppr), or $543 million for a 700-unit site at Tampines Street 62 (parcel B), was set in October by Sim Lian Land and Sim Lian Development.

This surpassed the previous record of $703 psf ppr for an EC site in Plantation Close in Tengah set in September by Hoi Hup Realty and Sunway Developments.

In 2018, the record stood at $583 psf ppr for the site of Piermont Grand EC in Sumang Walk, Punggol. 

Prices of new EC units have hit a fresh benchmark, with the average transacted price crossing $1,470 psf at Altura EC in Bukit Batok in 2023, PropNex noted.

Developers seeking heartland retail exposure will likely gun for a mixed-use site in Tampines Street 94 in Bedok Reservoir Road.

Located near Tampines West MRT station, this plot can offer 585 residential units and 10,500 sq m of commercial space in Tampines West, which will add retail amenities to the mature estate.

It could also enjoy pent-up demand as this area has not seen any GLS tenders awarded since that of the present Baywater condo site in Bedok Reservoir Road in December 2000.

How developers strategise their bids, given the plum sites unveiled in the first-half 2024 GLS programme, will be keenly watched. This especially with a slew of new launches expected to come on stream in 2024, and as buyers remain price-sensitive in the face of still-high interest rates.