SINGAPORE: For years, a pocket of green space next to Holland Village has remained empty – a seemingly odd sight in the bustling neighbourhood.
But on the large plot of land is a signboard – in red, white, and black – an indication of changes afoot. In fact, it could possibly be the estate’s next hotspot, based on the plans for it.
The site along Holland Road is one of the many state land parcels sold under the Government Land Sales (GLS) programme, a 50-year-old initiative where the authorities release land for development biannually to support Singapore’s urban development and economic growth.
CURRENT STATE LAND SALES PROGRAMMES
There are two state land sales programme in Singapore. One is run by the Ministry of National Development (MND), which releases land to build private homes, offices, shopping malls, hotels and even places of worship.
The MND on Wednesday (Dec 13) announced it would release six Confirmed List sites and nine Reserve List sites in the first half of the 2018 GLS Programme.
The other, called the Industrial Government Land Sales (IGLS) programme, is run by the JTC, which sells industrial land for companies to build infrastructure such as warehouses, factories, and workers’ dormitories.
The Urban Redevelopment Authority (URA) and Housing and Development Board (HDB) are MND’s sales agents. Channel NewsAsia understands there is no fixed demarcation as to which plots of land each of the two statutory boards is in charge of selling.
Under the two national land sales programmes, only leasehold land is available. The Singapore Land Authority said this allows the state to “reallocate land to meet the changing social and economic needs in land-scarce Singapore when leases expire".
MND’s programme sells land that tends to have a 99-year lease, while JTC said its land leases are typically on either a 20-year or 30-year tenure.
Both schemes work on a system consisting of two types of sites - confirmed list sites and reserve list sites, URA and JTC said. Sites on the confirmed list are launched for tender on pre-determined dates, while reserve list sites are launched for sale only when there is sufficient market interest for them.
URA said that the government considers “key planning strategies, the needs of the market, and the availability of sites” before selecting the land parcels to be sold. For instance, it may sell plots for high-density residential developments near transport nodes in order to optimise the use of the public transport system.
On the other hand, JTC said that it decides on the land quantum to release by monitoring the industrial property market, using indicators such as occupancy and rental rates to determine the level of interest for industrial land among industrialists and developers.
URA said that the MND land sales programme has four objectives: to support economic growth, help Singaporeans meet aspirations with the choice to upgrade to a private home, realise national planning objectives and help to stabilise the property market.
HAS THE PROGRAMME MET ITS OBJECTIVES?
As a result, MND might launch more sites if the government thinks the market is overheated, said Dr Sing Tien Foo, the director of the National University of Singapore’s (NUS) Institute of Real Estate Studies. This increases pipeline supply and tapers home prices.
However, he added that adjusting land supply might not be as effective as controlling demand through cooling measures.
“Development is a long-term process, with a four to five year gestation period, (so) the GLS programme may not be the best way to regulate prices in the short to medium term,” Dr Sing said. “The most efficient way … is through restricting demand and imposing transaction costs.”
Overall, Dr Sing said, the programme has been successful in meeting its four goals.
When the government land sales programme started in 1967, it began by selling land to help develop the tourism industry. Sites for hotels, malls, and entertainment centres in areas such as Beach Road and Kallang Park were sold.
Land sales in the late 1960s and early 1970s also worked on creating a new business district at Shenton Way, and redeveloping the Central Business District.
In 1974, the sale of sites for condominium began, starting with those that are currently home to Hillcrest Arcadia and Grangeford.
Then in the early 1980s, to keep up with the pace of industrialisation as Singapore’s economy rapidly grew, more land for factories and warehouses was made available.
When the 1990s came, one focus was to create commercial zones outside the financial district, with land in today’s regional centres such as Woodlands and Tampines put on the market. These decentralisation efforts continue today with the sale of commercial and hotel land parcels in the Jurong Lake District and Paya Lebar Central.
THE FUTURE OF LAND SALES
Dr Joseph Ooi Thian Leong, a professor at NUS’ real estate department, said future land sales will have to take note of evolving issues such as the ageing population.
Dr Ooi said he hopes certain sites can be set aside to build “retirement home villages”.
“One way they can do that is maybe by introducing a two-envelope system”, he added. A two-envelope system, which was first introduced by URA in 2004 for certain sites, means developers have to submit both a design plan and their bid price for the land parcel.
The industry experts, Dr Sing and Dr Ooi, said that they foresee future land parcels launched in areas surrounding the upcoming MRT lines – the Cross-Island Line and the Thomson-East Coast Line – as well as the Tanjong Pagar Terminal, which is set to relocate to Tuas.