Keen competition expected for 8 residential sites on confirmed list

Market-watchers expect keen competition for the eight residential sites on the confirmed list under the Government Land Sales (GLS) Programme for the first half of next year. But land prices may not necessarily come down.

Analysts also expect more foreign developers to bid for sites over the next three to six months, keeping prices competitive especially for popular locations.

Donald Han, managing director, Cushman & Wakefield, said: “You will potentially see a more aggressive bidding which will lead to a higher price being achieved. However, I think the prices have moved quite a fair bit… We will probably have a closer bid gap in between the various bids by developers.”

Many of the residential sites on the confirmed list are located near train stations. But observers said on Friday the proximity to public transport may not necessarily drive up bid prices and therefore, the cost of homes.

Besides transport, properties that are near parks and reservoirs may also command a premium.

Market-watchers said the sites on offer will yield 2,925 new units, but are unlikely to create a supply glut.

Cynthia Ng, deputy managing director, Investment Advisory and Valuation, Colliers International, said: “There is liquidity in the market and the population has also increased. More people are also looking to buy a second property as well, so the demand is there.”

“We would probably see prices increase for the residential market overall, about 8 to 12 per cent. That being said, we think we won’t see the repeat of the last six months in terms of price increases,” said Mr Han.

Private home prices rose about 16 per cent in the third quarter, snapping four quarters of decline.

Analysts said the two executive condominium sites offered under the confirmed list could plug the widening price gap between private suburban homes and public resale flats.

On average, private homes outside of the central region cost about 50 per cent more than HDB resale flats.

Two new hotel sites in the city – Robertson Quay and Robinson Road – have also been introduced on the reserve list, yielding some 420 rooms.

There could be strong demand for the Robinson Road site which now houses The Ogilvy Centre. The Urban Redevelopment Authority (URA) has yet to decide if the site will be sold on a 30-year or 60-year lease.

The lease at The Ogilvy Centre ends next February and the URA hopes to launch the new hotel site in June 2010. It is also studying the possibility of adding more levels to the existing conserved building.

No new office sites were offered under the latest exercise. Some 7.7 million square feet of confirmed supply is already expected from now till 2014, according to CB Richard Ellis’ estimates.

The GLS Programme for the first half of 2010 will have 42 sites in all.

Source : Channel NewsAsia – 6 Nov 2009

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