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Straits Times
2 days ago
- Business
- Straits Times
Strong bidding for Lakeside Drive site amid uncertain economic outlook seen as vote of confidence
The Lakesite Drive site drew a top bid of $608 million from two subsidiaries of City Developments. PHOTO: LIANHE ZAOBAO SINGAPORE - The state tender for a plot of residential land at Lakeside Drive near the Jurong Lake District closed on June 3 with six bids, in what analysts say is a vote of confidence by developers in private housing demand, especially at sites in established housing estates and near MRT stations. The Government Land Sales (GLS) site, which is expected to offer 575 units and 1,000 sq m of commercial space, drew a top bid of $608 million from two subsidiaries of City Developments. This translates to a land rate of $1,132 psf ppr (per square foot per plot ratio). The strong interest from developers for the Lakeside Drive plot comes after a Media Circle (Parcel B) site drew no bids on April 29 and a Lentor Gardens site drew a mere two bids on April 3. Both these earlier tenders had led analysts to question if developers had turned cautious, given an increasingly uncertain macro-economic outlook. Tariff-related disruptions and turmoil have already caused the Government to revise down Singapore's 2025 GDP growth forecasts, and analysts are watching how the changing global trading environment will affect the economy and, in turn, the housing market. The industry is waiting to see how the GLS programme – the mechanism through which the state releases land for development by the private sector – will be calibrated to deal with the projected downturn. In previous financial crises, the GLS programme was temporarily suspended in a bid to curtail housing supply – as was the case during 1998 and 1999 during the Asian financial crisis, with the exception of some sites. The Government only resumed releasing sites from 2000 when the market showed signs of recovery, said real estate veteran Bond Lam Chern Woon. Mr Lam, who was former head of research and consulting at Edmund Tie, pointed out that the Government took a similar approach in 2008 and 2009 during the global financial crisis. He added that during the pandemic, GLS sites were launched as scheduled in 2020, but the average tender period (from tender launch to tender close) was noticeably longer compared with that in the pre-pandemic years. This timeframe was about 4.5 months for GLS sites launched from 2020 to 2022, compared with 2.7 months from 2017 to 2019. 'The policy intent of the extended tender periods was to grant developers more leeway to assess market conditions,' Mr Lam said. Will the Government adopt similar measures with the GLS programme this time? Analysts believe an outright suspension of the GLS programme is unlikely because the authorities will likely have to continue to prime sites for new homes, due to the need to supply land to meet housing demand. Furthermore, domestic demand for new non-landed homes continues to be supported for now. On the private property front, housing supply from the GLS programme will be raised to 8,505 units in the first half of 2025, up from 8,140 units in the second half of 2024. PropNex chief executive officer Ismail Gafoor pointed out that the unsold stock of uncompleted private homes, excluding executive condominiums, is much lower now than in previous crises – so there is much less risk of the market crashing because of an oversupply. There were 18,125 such units in the first quarter of 2025, compared with 29,149 units in first quarter 2020 when the pandemic struck, and around 43,000 units in 2008 during the global financial crisis, he said. In the case of Media Circle Parcel B, while this was the second time in about a year where no bids were received for a GLS site, analysts said this could be attributed to site-specific factors including a lack of HDB upgraders and amenities near the site in the one-North precinct. The lacklustre launch in April of the nearby Bloomsbury Residences was also a signal to developers of softer housing demand. However, the better-than-expected bidding interest for the Lakeside Drive site indicates that developers may be saving their bullets for more choice sites. These include those in new housing precincts in Bukit Timah Turf City and the former Keppel Golf Course; Chuan Grove and a mixed-use site in Hougang Central, both of which are close to an MRT station. Developers favoured sites like Lakeside Drive for its ready pool of HDB upgraders from nearby Bukit Batok, Jurong East and West housing estates, and proximity to a substantial industrial employment zone in Boon Lay, Jurong, Pioneer and Tuas. That said, analysts point out that healthy housing demand is contingent on there not being significant job losses and that household balance sheets remain strong. Mr Edwin Loo, real estate consultancy Cistri's associate director, said: 'If current events end up being a trigger for slower income growth and job creation, we can expect demand for private housing to begin to soften gradually.' In such a scenario, he pointed out that buyers who are on the cusp of affording private property are likely to 'act conservatively and opt for the HDB resale market, rather than the lower rungs of the private housing market'. Mr Loo, a former urban planning team lead at the Urban Redevelopment Authority, also said the tariff-related economic instability would affect 'project feasibility assumptions made by private residential developers, especially around potential sale prices, interest rates, and development costs'. He added that he believes the Government is likely 'actively considering a range of economic scenarios' and evaluating how they would impact household incomes, household formation and demand for housing across various price points across the public and private market. Whether that will lead to more state land being alloted for public housing and executive condominiums would bear watching. Join ST's WhatsApp Channel and get the latest news and must-reads.
Business Times
09-05-2025
- Business
- Business Times
Some 12,000 new homes to come up on sites rezoned for housing across 11 areas
[SINGAPORE] A slew of land parcels in 11 areas across the island are set to be rezoned for housing, in a move that will give a major boost to supply in popular residential areas. These include plots of land in established regional centres such as Toa Payoh and Tampines, where previous government land sales saw strong interest from developers and where new projects were recently launched at fresh benchmark prices. Sites are also being lined up for rezoning or higher-density development in other in-demand housing areas such as Bedok and Pasir Ris, upcoming neighbourhoods such as Tengah, and fresh supply on the former Keppel Golf Course land. The planning changes, proposed in amendments to the Master Plan 2019 gazetted by the Urban Redevelopment Authority on Wednesday (May 7), could produce some 12,000 new housing units in both private and public projects in the near term. A parcel carved out of the former Keppel Golf Course site, along Telok Blangah Road, has been earmarked with a high-intensity gross plot ratio of 4.3, which analysts estimate could yield up to 1,000 public housing flats. These would add to the first 740 new homes from the Keppel site, to be built on a plot being sold in this year's Government Land Sales (GLS) programme. Lee Sze Teck, senior director of data analytics at Huttons Asia, reckons the Housing and Development Board (HDB) project will be a Prime category Build-to-Order (BTO) one. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'The response to this Prime BTO is likely to be overwhelming,' he said. The last BTO project in the area, Telok Blangah Beacon, attracted more than 30 first-timers for each four-room flat in 2021, he noted. BTO prices of the four-room flats ranged from S$602,000 to S$710,000, while three-room flats were priced from S$419,000 to S$504,000. The project is expected to be completed in 2027. In the city fringe area, Toa Payoh and Bishan may soon see new residential projects. Both locales are popular with homebuyers for their proximity to elite schools and central location. The most recent new condo launch in the area, The Orie at Toa Payoh Lorong 1, sold 86 per cent of its 777 units at S$2,704 psf on average over its launch weekend. Plots bounded by Toa Payoh Link and Toa Payoh Rise may be rezoned to residential with commercial use on the first storey. A high gross plot ratio of 4.7 has been proposed for the area, which is next to Caldecott MRT station and could yield a total of 4,000 to 5,000 dwelling units, according to Lee. Lee said the sites could turn out a mix of public and private homes. 'Toa Payoh is a very popular area among buyers, and almost all the four-room and five-room flats that fulfilled their minimum occupancy period in 2024/2025 achieved a selling price of S$1 million and above.' Another parcel along Lorong 4 Toa Payoh with a proposed gross plot ratio of 3.4 could yield some 300 to 350 condo units or 200 to 250 HDB Plus flats, estimated OrangeTee's chief researcher and strategist Christine Sun. In the Sin Ming area, a plot at Lorong Puntong spanning slightly more than 4,000 sq m is expected to be used for condo development and could see about 130 to 150 units, said chief research officer Nicholas Mak. Land plots along Upper Thomson Road are also expected to be turned into residential use, and could yield around 2,200 to 2,300 condo units, or 1,500 to 1,600 HDB flats, said Sun. In the east, a residential site with a health and medical zone is being proposed for Tampines Street 11. With a land area of about 14,433 square metres (sq m) and gross plot ratio of 2, Sun expects the site to yield 200 to 250 HDB flats. The site is near a GLS site also on Tampines Street 11, which was awarded in 2023 to UOL, Singapore Land and CapitaLand Development at S$1.21 billion, or S$885 per square foot per plot ratio. The project, Parktown Residence, was launched in February 2025 and posted strong sales. About 87 per cent of the 1,193 units in the large mixed-use development were sold within the first two days, at an average of S$2,360 per square foot (psf). In the neighbouring planning area of Pasir Ris, a parcel bound by Pasir Ris Drive 3 and Pasir Ris Drive 10 has been proposed to be rezoned as residential with a gross plot ratio of 3.2. The site is likely to be sold under the GLS programme, said Mak, and could potentially yield 1,100 to 1,180 condominium units. Pasir Ris has not seen a GLS site for private condo development since 2012, and demand in the east is strong, said Mak, pointing to the robust take-up rate of Parktown Residence. The last GLS site sold in Pasir Ris was developed into Vue 8 Residences. Also in the east, Bedok South Road will see more new homes being built. Land that housed schools is expected to be rezoned to residential use, while an adjacent parcel will have its plot ratio raised. OrangeTee's Sun said the earmarked area can yield about 1,000 to 1,100 condo units or 700 to 800 HDB Standard flats. Up in the north at Yishun, a site located near Chencharu Park is being set aside for residential use. An estimated 1,000 or more BTO Standard flats may be built on the site, said Huttons' Lee. The government had earlier announced plans to grow a new estate in Chencharu, where it sees potential for 10,000 homes. The first GLS site to be put up for sale in Chencharu is coming up for tender on May 22, with a 3-hectare parcel on offer for 875 condo units and 13,000 sq m of commercial space. Land parcels at Sunbird Avenue, Simei Road and Upper Changi Road may also be redeveloped into residential projects. The proposed amendments will inject more homes and amenities into the Upper Changi Road area and facilitate infrastructural works to serve future developments, noted URA. Lee said: 'If there are flats with shorter waiting time at Chencharu, Bedok South Road, Tampines Street 11, Sunbird Avenue/Simei Road and Pasir Ris Drive 3, they may potentially pull demand away from the resale market and help to stabilise prices.' HDB resale prices were up 1.6 per cent in the first quarter of 2025, lower than the 2.6 per cent price increase seen in the previous quarter. In the west, plans are in the pipeline to redevelop several parcels within Brickland District in Tengah Town into housing sites, parks, places of worship, health and medical care facilities, educational institution and civic and community institutions. The three parcels could yield around 1,400 flats, said OrangeTee's Sun. Apart from housing, the URA on May 9 earmarked land parcels along Eunos Avenue 5 and Dover Road to be redeveloped into health and medical care zones. A new nursing home is likely to be built in Dover to meet the anticipated demand for such services in the area, said the authority.
