Private housing supply from confirmed land sale sites up 17.2% for H1 2021: MND

DEVELOPERS are getting a much-needed boost to their land inventory with an increase in the supply of residential units for the first-half 2021 government land sales (GLS) programme.

This comes as the supply of dwelling units has risen by 17.2 per cent for confirmed list sites in the latest GLS programme announced by the Ministry of National Development (MND) on Thursday morning. (see Amendment note)

Huttons Asia's director of research Lee Sze Teck said this marks the first significant increase in the supply of units since the second half of 2017. He added that the increase in supply is a response to healthy demand in the market.

The confirmed list released on Thursday comprises four private residential sites, including one executive condominium (EC) site. These sites can yield about 1,605 private residential units (including 590 EC units) and 9,200 square metres (sq m) gross floor area (GFA) of commercial space. This is up from the 1,370 units and 1,500 sq m GFA of commercial space in the previous half.

The 2.37-hectare (ha) EC site, Tampines Street 62 (Parcel A), as well as the 1.72-ha Lentor Central plot, were carried over from the reserve list of the second half of 2020 GLS programme. The estimated launch dates for both plots are in April 2021.

Desmond Sim, CBRE South-east Asia head of research, said that out of the four sites, three have commercial components, which could help add vibrancy and convenience to the new estates.

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Mr Lee said the plot at Lentor Central will inject fresh supply into the area and allow all stakeholders to tap the potential of Lentor MRT station, which will be completed soon.

The remaining two plots are new and located at Slim Barracks Rise in one-north. Parcel A has a site area of 0.79 ha, while Parcel B has a site area of 0.59 ha. Each plot is expected to yield about 265 and 140 residential units respectively. They will be launched in June 2021.

Mr Sim said the Slim Barracks Rise sites could be especially appealing to developments due to their proximity to a transport node, surrounded by the one-north biomedical hub. Moreover, smaller parcel sites like these tend to be more palatable and manageable for developers, he added.

JLL senior director of research and consultancy Ong Teck Hui said housing demand for the Slim Barracks Rise sites might also be generated by the growing working population in the area.

"The sites were introduced as part of the government's effort to inject more residential spaces in one-north estate, promoting the 'live, work and play' concept," he said.

CBRE Research believes the confirmed list sites from this GLS programme are likely to attract a healthy level of bidding activity, as evidenced by the tenders of the previous two sites at Tanah Merah Kechil Link and Yishun Avenue 9.

The Tanah Merah Kechil Link parcel attracted 15 bidders when the tender closed in October this year.

Heightened competition may lead developers to consider sites offered under collective sales as many will be unsuccessful in bidding for the limited number of GLS sites, Mr Ong said.

Echoing the sentiment, Mr Lee said a new en bloc cycle is expected to take place in 2021.

Meanwhile, the reserve list comprises five private residential sites, including one EC site, three white sites and one hotel site. Sites on the reserve list can yield about 5,440 private residential units (including 700 EC units), 92,000 sq m GFA of commercial space and 1,070 hotel rooms.

Three of the residential sites, the white sites and the hotel site were carried over from the second half of 2020 GLS programme.

One of the two new residential sites on the reserve list is Jalan Tembusu, which spans 1.95 ha and estimated to yield about 640 units. The other is an EC site at Tampines Street 62 (Parcel B), which spans 2.8 ha and is estimated to yield 700 residential units. Both plots will be made available for application in May 2021.

MND said the land supply from the H1 2021 GLS programme has been "carefully calibrated" to take into account the Covid-19 pandemic and macroeconomic situation.

Given the continued uncertainties in economic and labour market conditions, the government has decided to maintain a moderate supply of private residential units on the confirmed list and will not introduce any new sites for predominantly commercial or hotel use in the H1 2021 GLS programme, the ministry said.

"Nonetheless, there is a good selection of sites with additional supply in the reserve list that developers can initiate for development if they assess that there is demand," MND added.

Amendment note: A previous version of this article incorrectly stated the percentage increase of confirmed land sale sites.