Singapore acts to draw developers back to state land tenders
Last Friday (Jun 13), the Ministry of National Development (MND) said it will release land for about 4,725 private housing units in H2 2025 through the confirmed list, a 6 per cent drop from the 5,030 units in H1 2025. These figures include executive condominium (EC) units, a public-private housing hybrid, with initial buyer eligibility and resale restrictions that are completely lifted 10 years after an EC project has been completed.
Beyond the numbers, what is more important is that developers are being offered an appealing selection of plum sites that is likely to draw more of them to participate in government land sales (GLS) tenders than in the past 15 months.
After all, it is only when these sites are sold to developers can the intended private housing supply be actualised and cater to home buying demand. This includes aspirational upgrading demand from those living in Housing & Development Board flats.
Under the GLS programme, property developers are offered land through two channels.
On the confirmed list, sites are launched for sale according to schedule, regardless of demand.
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In contrast, sites on the reserve list are launched for sale only upon successful application by a developer, or when there is sufficient market interest.
By market watchers' reckoning, the package of sites MND has put together for the next-half confirmed list is so attractive that developers are unlikely to trigger for sale sites on the reserve list.
All 10 residential sites – including two EC plots – on the H2 confirmed list are new. They offer a wide range of choices for developers.
There are sites in the prime districts (next to Newton MRT station, and in Dunearn Road) and in city-fringe areas (in Tanjong Rhu Road, next to Singapore Swimming Club; and a plot in Kallang Avenue facing the waterway).
There are also well-located plots in the suburbs (a site in front of Tanah Merah MRT station, another a stone's throw from Lentor MRT station and an EC site near Woodlands South MRT station).
MND will also be offering a private housing site near Dairy Farm Nature Park, and an EC site in Miltonia Close facing a golf course and the Lower Seletar Reservoir. The new projects on these two sites may attract home buyers who prefer to live in a more nature-oriented setting.
Bite-sized and more manageable sites
The appeal of the latest confirmed list for developers is not only that it has a spread of eye-catching sites but that most of these are relatively bite-sized, making the total investment more manageable. There are no mega sites that can yield 700 to 1,000 housing units as seen in GLS tenders over the past few years.
Five of the 10 plots on the H2 confirmed list can yield between 335 and 450 units.
The parcel that can generate the most homes, 625 units, is in Dover Road. It has strong selling points: It is near the one-north MRT station and a string of educational institutions, from Fairfield Methodist School (Primary) and Anglo-Chinese Junior College to the Insead and Singapore Institute of Technology @ Dover campuses.
The combination of well-located sites and palatable sizes is calculated to pull more developers to state tenders. The competition will raise the likelihood that the respective top bids will be high enough for the state to award the plots.
Developer participation at state land tenders has been patchy in recent times.
Excluding EC sites, tenders have closed for 21 sites under MND's GLS Programme over the past 15 months. Of these, 10 sites fetched either one or two bids.
Two of these 10 sites were not awarded as the bids were assessed to be too low: the Jurong Lake District (JLD) master developer site and the Media Circle site for which the entire residential component is to comprise long-stay serviced apartments.
There were also a couple of sites – out of the pool of 21 – that did not garner any bids: Upper Thomson Road (Parcel A), which included a mandatory long-stay serviced apartment component, and Media Circle (Parcel B).
The tender for Upper Thomson Road (Parcel A) will be launched again this month, under the H1 2025 confirmed list; this time, long-stay serviced apartment use will not be mandated but can be allowed subject to approval.
The other three plots – the JLD master developer site, Media Circle and Media Circle (Parcel B) – are available on the reserve list.
Industry feedback on JLD master developer site
Those poring through the details of the latest GLS Programme would have spotted an interesting nugget of information in a footnote pertaining to the JLD master developer site on the reserve list. The 6.5-hectare site, zoned white, was previously launched for tender under the H1 2023 confirmed list but not awarded.
The minimum office quantum required for Phase 1 of the master developer site has been cut from 70,000 square metres (sq m) gross floor area (GFA) to 40,000 sq m. A spokesperson for the Urban Redevelopment Authority (URA) told The Business Times on Friday night that the minimum office quantum for the entire site, too, has been reduced from 146,000 sq m GFA to 100,000 sq m.
The changes were made in end-2024 following extensive engagements with industry stakeholders after URA announced the decision in September last year not to award the tender for the site.
The master developer site, meant to kickstart the next phase of development in JLD, was put on the market under a dual-envelope concept-and-price tender launched in June 2023. The tender closed in March 2024 with a consortium of five developers – comprising CapitaLand Development, City Developments, Frasers Property, Mitsubishi Estate and Mitsui Fudosan (Asia) – submitting two bids, with different concept proposals for the site. There were no other bidders.
Six months later, URA said the tendered price of S$640 per square foot per plot ratio for the shortlisted concept was assessed to be too low. The site was then placed on the reserve list.
URA has envisioned JLD as the 'largest mixed-use business district outside the city centre'. Industry players, however, have reservations about the depth of office demand in the vicinity of Jurong East MRT station. Generally, big-name tenants prefer to have their Singapore offices in prime Central Business District (CBD) locations such as Marina Bay and Raffles Place. Key factors cited include the prestigious address, talent retention, C-suites' preference, and employee commuting time tends to be more equitable from all corners of the island to the CBD.
Despite the reduction in the minimum office quantum requirement, the maximum GFA for the entire master developer site remains unchanged at 365,000 sq m.
However, the maximum residential GFA for the overall site has been increased to 186,000 sq m, of which a maximum 166,000 sq m can be for private apartments/condos. Both these figures are 20,000 sq m higher than the original numbers when the site was launched.
Being allowed flexibility to develop a bigger quantum of private apartments/condo units which can be presold should positively impact a potential master developer's cashflow, noted analysts.
URA's spokesperson said the reduction of the minimum office quantum requirement was made to 'provide developers with more flexibility in determining the mix of uses and to better pace the roll-out of office space for the master developer site'.
For private housing sites, too, the authorities have been taking heed of developers' participation rates at GLS tenders, how they make a beeline for choicer sites and give mediocre sites a miss. Developers have also been giving feedback that sites that can generate fewer than 500 housing units would be more palatable.
URA engaging developers and other stakeholders to better understand the market dynamics is definitely a step in the right direction, especially in the current uncertain environment.
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