Office rents down in 2009 and likely to keep falling in 2010, say analysts

Office rents down in 2009 and likely to keep falling in 2010, say analysts

By Ng Baoying

SINGAPORE: Office rents in Singapore are down almost 50 per cent for the entire 2009 and observers said this is mainly due to the global economic crisis.

But the fall is not cause for undue concern as it follows a 90 per cent spike in rents in 2008.

However, analysts said there’s room for rents to fall further in 2010.

Singapore’s office rentals have suffered amid the global downturn as many companies with offices here either wound-up operations, or cut back on space needs.

Chua Chor Hoon, senior director, Research, DTZ Debenham Tie Leung (SEA), said: “I think it swung from extreme pessimism in the beginning of the year to hopeful optimism at the end of the year. In the beginning of the year, no one was looking at lease renewal or expanding, but towards the end of the year we see more activity coming in.”

Donald Han, managing director, Cushman & Wakefield, said: “It’s been pretty much a slide down the hill in terms of rents concerned, mainly because of the fact that after the global financial crisis, a lot of banks have started to retrench staff and give up premises.

“We have pretty much bad news in the first and second quarter where rents came down by as much as 40 per cent in the first half of 2009. The good news is we started to see an uptick in demand in the third quarter.”

However, rather than stop rents from falling further, the demand only helped slow down the pace of the decline.

At the beginning of the year, renting office space in Singapore in the prime areas would cost about S$16 per square foot. But that’s down to about S$7.90 now. The lowest rents have ever been is S$4.30 in 2003.

Analysts said that the fall this year isn’t as bad as it seems when taken in historical context.

Mr Han added: “In 2007, when the market went up at stratospheric levels, rents went up by 89 per cent in just one year. So to come down 55 per cent in 2009, versus an uptick of almost 90 per cent, we still have a balance of upside in that sense.”

At its peak, prices for some office buildings hit as high as S$21 per square foot.

And property watchers said rents are likely to continue falling before bottoming out at the end of 2010 at about S$6.

They said one reason for a continued fall is new supply coming on stream.

Mr Han added: “The biggest problem for office market is the supply element has been huge mainly because of Government Land Sales introduction in 2007. A lot will start to complete in 2010 and 2011.”

Mr Chua added: “The supply is substantially higher than historical average. There is more than two million square feet of new supply this year compared to historical average of 1.5m square feet. And we are going to have more than two million square feet of new supply over the next two years. That’s something that’s going to weigh down on the office sector.

DTZ added that the outlook for the office sector will depend largely on Singapore’s economic recovery as this will affect expansion plans for businesses.

It also added that it’s unlikely that the government can help as its main control method is to use supply via the government land sales programme.

However, any action is unlikely to be felt in the near term as office buildings usually take about four to five years to complete. - CNA/vm

Source : Channel NewsAsia - 31 December 2009

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10 sites in industrial GLS for first half of 2010

10 sites in industrial GLS for first half of 2010

By Jonathan Peeris, 938LIVE

Motorists travel over the bridge against the view of Singapore skyline.

SINGAPORE: The government has announced that its industrial land sales programme for the first half of 2010 will have 10 sites including two on the confirmed list.

Sites on the confirmed list will be put up for tender regardless of developers’ interest.

The two on the confirmed list includes a site at Tampines Industrial Avenue 4 which was previously on the reserve list and a new site at Ubi Road 1.

The two confirmed sites have a total site area of 8.39 hectares.

The rest of the sites are on the reserve list.

These sites will be pushed out for sale only after a developer indicates his interest by committing to a minimum bid.

Only one of the sites, at Pioneer Road North, is new to the list.

The remaining seven sites will be carried over from the 2009 reserve list.

These include areas such as Woodlands Ave 12, Yishun Ave 6, Serangoon North Ave 4 and Toh Tuck Ave.

The eight sites on the reserve list have a total site area of 13.46 hectares.

The confirmed list was suspended in October last year given the uncertain market outlook then.

But given stronger demand this year, National Development Minister Mah Bow Tan in September announced that the confirmed list will be reinstated in the Government Land Sales Programme for the first half 2010. - 938LIVE/vm

Source : Channel NewsAsia - 31 December 2009

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Far East Organization sees strong demand for The Shore Residences

Far East Organization sees strong demand for The Shore Residences

By Wong Siew Ying,

SINGAPORE: Far East Organization said it has seen strong demand for its latest project, The Shore Residences, since private previews started two weeks ago.

The 408-unit residential development is located in the Katong area.

Far East said over 70 units have been sold and prospective buyers have also registered their interest for units, which will be released at the official launch on January 21.

Among them, the one- and two-bedroom units were most popular.

According to Far East, almost all of the 84 one-bedroom units, priced from S$658,000 each, have been sold out.

The two-bedroom units, which make up the majority of the development, are priced from S$1.1 million.

The Shore Residences is expected to be ready in 2015.

- CNA/sc

Source : Channel NewsAsia - 31 December 2009

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Green Lodge condo up for en bloc sale

Green Lodge condo up for en bloc sale

THE improving property market has prompted owners at Green Lodge Condominium in Toh Tuck Road to put their estate up for collective sale.

They want $135 million for the freehold estate in Toh Tuck Road, an asking price of $683 per sq ft per plot ratio, including development charge.

That will give owners about $1.55 million to $1.58 million per unit - about 40 per cent more than the open market price, said Mr Jeffrey Goh, head of investment sales at the estate’s marketing agent, Newman & Goh.

Like other sales launched in the latter half of this year, the Green Lodge owners voted for the en bloc sale many months ago but have held off until the market looked more promising.

The majority agreed to sell their property as early as April but the market was very weak then, said Mr Goh.

Green Lodge condo sits on a site of 151,075 sq ft near the Toh Tuck campus of the Canadian International School.

With a plot ratio of 1.4, it can be redeveloped to about 211 units of boutique apartments of about 1,000 sq ft, said Mr Goh. The new development could sell for at least $1,250 per sq ft (psf) on average, he added.

Other residential developments in the vicinity include The Beverly - which was launched earlier this year at an average price of $750 psf - Signature Park and Goodluck Garden.

More owners are now working towards launching their properties for collective sale in the wake of the improving market.

There will be more collective sale launches in the first and second quarters of next year, Mr Goh said.

But the success rate is still up in the air as there remains a mismatch of price expectations between sellers and buyers, he said.

There have been several collective sale launches this year but only one of them - Dragon Mansion - was sold.

The tender for Green Lodge closes on Jan 13, a day before the close of another collective sale tender - Mayfair Gardens in Rifle Range Road.

JOYCE TEO

Source : Straits Times - 31 December 2009

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2010 industrial land sales plan launched

2010 industrial land sales plan launched

By Sylvia Paik

THE Government launched its industrial land sales programme for the first half of 2010 yesterday with clear signs that it feels the market has turned.

The Ministry of Trade and Industry has reinstated two sites on the confirmed list and placed eight on the reserve list.

It had suspended the confirmed list earlier this year in the light of the downturn but yesterday’s announcement reflects the recent turnaround in the property sector.

The total land area on the sales list is 21.85ha.

DTZ’s head of South-east Asian research Chua Chor Hoon added: ‘The Government’s release of the two confirmed sites reflects that the property market is past the worst stage and is getting back on its feet.’

Confirmed sites are put up for tender regardless of a developer’s prior expression of interest.

The confirmed sites are a 5ha lot at Tampines Industrial Avenue 4 and 3.39ha at Ubi Road 1.

Tender details for the Tampines site will be released in March while the Ubi Road details will be out in June.

The eight sites on the reserved list are in Pioneer Road North/Soon Lee Road, Woodlands Avenue 2, Kaki Bukit Avenue 4, Ubi Road 1/Ubi Avenue 4, Serangoon North Avenue 4, Toh Tuck Avenue and two parcels in Yishun Avenue 6.

Sale conditions for Pioneer Road North/Soon Lee Road will be out around May while details for the other sites are already available and applications can be submitted.

Sites on the reserve list will be triggered for tender only when an initial offer that meets the minimum purchase price is made.

Three reserve list sites - at Kaki Bukit Road 2, Woodlands Industrial Park E5/Woodlands Avenue 4 and Pioneer Road North/Soon Lee Drive - were sold this year.

Knight Frank’s business space industrial director Lim Kien Kim said the launch is in line with growing expectations as the economy is improving.

Source : Straits Times - 31 December 2009

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Asian property firms expect to raise bonus, pay

Asian property firms expect to raise bonus, pay

By UMA SHANKARI

MANY Asian real estate companies expect to pay higher year-end bonuses and wage increases, according to a survey sponsored by the Asian Public Real Estate Association.

Thirty-four real estate companies and funds took part in the survey, which showed that the expected increase in base salary is 1.7 per cent on average.

Companies that expect to have done better this year reported a higher expected base salary increase of 4.3 per cent on average.

Last year, the average year-end salary increase provided among all survey participants was 1.2 per cent.

The trend is similar for bonuses. Across all survey participants, the average projected bonus increase is 8 per cent - a significant increase given the average projected bonus change last year was minus 17 per cent.

Companies that expect to have done better this year are projecting a bonus increase of 21 per cent, while those that expect to have done worse are projecting a 2 per cent cut in bonuses.

Looking at individual markets, on average across all survey respondents, employees in China and Singapore are expected to receive larger salary increases (2.7 and 3.1 per cent respectively) than those in Australia (0.5 per cent), Hong Kong (1.6 per cent), and Japan (1.5 per cent).

In terms of expected bonus increases, across all survey respondents, China again stands out with an average expected increase of 13 per cent, compared with Australia (4 per cent), Hong Kong (8 per cent), Japan (5 per cent) and Singapore (8 per cent).

The survey, carried out in early November, covered trends in cash compensation - including timing, compensation mix and year-on-year changes in cash compensation, as well as base salary changes and annual incentive or bonus payouts by financial performance, organisation level and geographic location.

Source : Business Times - 31 December 2009

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Green Lodge asking $135m for en bloc deal

Green Lodge asking $135m for en bloc deal
With a development charge of $9.5m, it costs $683 psf ppr

By EMILYN YAP

GREEN Lodge at Toh Tuck Road has been put up for collective sale - the second residential site to be marketed en bloc in slightly more than a week.

Promising: Green Lodge currently comprises 80 units ranging from 1,679-2,110 sq ft in size. MrGoh, investment sales head of Newman & Goh, says there is potential to redevelop the site to house 211 units with an average size of 1,000 sq ft
Owners of the freehold Green Lodge are asking for $135 million. The site has a land area of 151,075 sq ft and a plot ratio of 1.4. Adding a development charge of around $9.5 million, the price works out to $683 per sq ft per plot ratio (psf ppr).

Newman & Goh is marketing the site and obtained consent for the sale from more than 80 per cent of the owners in April. Its investment sales head Jeffrey Goh tells BT that the absolute sum of less than $150 million is relatively affordable and he expects several developers to show interest in the parcel.

In a release, Newman & Goh notes that the site is ‘attractively priced’, given that developers have paid more than $500 psf ppr for state residential land in the last few months.

The price for Mayfair Gardens at Rifle Range Road - launched for collective sale by another agency just last Monday - is $857 psf ppr or $250 million (which includes the development charge). The 99-year leasehold site has a remaining lease of about 72 years.

Green Lodge currently comprises 80 units ranging from 1,679-2,110 sq ft in size. Mr Goh says there is potential to redevelop the site to house around 211 units with an average size of 1,000 sq ft. He expects the average selling price of the new development to be at least $1,250 psf, ‘given the demand going forward’. The tender for the site will close on Jan 13, 2010.

According to caveats lodged, a unit at Green Lodge changed hands for $643 psf or $1.08 million last month. The site is located among other private residential estates, including Rainbow Gardens which was also sold en bloc. It is also near Beauty World Plaza and Bukit Timah Plaza, and will be close to the upcoming Beauty World MRT station.

Colliers International research and advisory director Tay Huey Ying notes that the location of the site is fairly attractive. Based on the absolute price, it is also ‘one of the more palatable freehold development sites’ on the market.

She estimates that the winning developer would have to sell the units at around $1,000-$1,100 psf. Nearby, units at The Beverly went for $888-$1,130 psf or $1.35-$2.1 million in October.

The collective sales market had been quiet for most of the year given the uncertain economic outlook. It was not until early this month that the first deal of 2009 emerged, in the $100.8 million sale of Dragon Mansion.

Activity is gradually returning with the recent launch of Mayfair Gardens and now, Green Lodge. ‘It’s a reaction to improved market conditions and sentiments,’ Ms Tay says. ‘The business environment and the investment environment should all be improving next year.’

Source : Business Times - 31 December 2009

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GIC mulls change to how it defines global inflation

GIC mulls change to how it defines global inflation

This will affect its benchmark for target returns on investments

By JOYCE HOOI

THE Government of Singapore Investment Corporation (GIC) is mulling over whether to include the inflation rates of countries such as China in its benchmark for target returns on investments, according to a recent interview published in the CommonWealth Magazine.

Dr Tan: Balance of power in decision-making has shifted to the G-20 bloc
During the interview, Tony Tan, deputy chairman and executive director of GIC, said: ‘We’re thinking about this’, in response to a question on whether the time had come to include China’s inflation rate in the calculation of the benchmark.

Currently, GIC aims to achieve a real rate of return over and above the G-3 inflation rate, which is the weighted average inflation rate of the US, Japan and the European Union.

Dr Tan said during the interview: ‘I would imagine that as the Asian economies grow, countries like China will play a much greater role in the world economy. And when that happens, I think it would make sense for GIC to re-look again as to whether our definition of global inflation rate as the average of the inflation rates of US, Europe and Japan is the right one or not, whether we should include countries like China, because that will be more realistic.’

Dr Tan also said that the balance of power in decision-making has shifted over time from the G-7 to the G-20 bloc of developing nations, of which countries like China, Brazil and Indonesia are members.

‘This is a reflection of how economic wealth and influence is shifting from Europe and America to the emerging countries,’ he said.

‘Ten years ago, 80 per cent of world economic growth took place in USA and Europe. The share has steadily declined. By and large, economic growth will be longer and stronger in Asia than in the West.’

Dr Tan’s interview with the magazine precedes the CommonWealth Economic Forum next month in Taiwan, at which he will be a forum speaker.

At end-March, GIC had 26 per cent of its investments in Asia, including Japan, and Australasia.

Last month, GIC announced the purchase of a 5.4 per cent stake in US-listed Chinese video game company Shanda Games and a 6.9 per cent stake in Hyatt Hotels Corp.

Across the economic landscape, the going will be less-than-smooth over the next decade, Dr Tan reckons.

‘Investment will become much harder and the return much lower in the next 10 years,’ he said. ‘The economic growth rate will be lower.’

GIC’s portfolio lost more than 20 per cent of its value in Singapore dollar terms in the fiscal year ended March 31.

This loss weighed on its 20-year nominal annual rate of return, reducing it from 5.8 per cent to 4.4 per cent.

After accounting for global inflation, its real rate of return was 2.6 per cent, down from 4.5 per cent.

Source : Business Times - 31 December 2009

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Getting public-private partnership right

Getting public-private partnership right

It can provide new business opportunities, better value by tapping private sector skills and resources

By ANNA TEO

(SINGAPORE) The 55,000-seat Olympic stadium with extendable tiers was billed as the largest ultra-lightweight tropical dome in the sporting world, with a sliding roof that lights up at night and doubles as a projection screen to create dramatic effects for night events.

It’s to be the centrepiece of the envisaged 35-hectare Sports Hub that will see, coming up at the Kallang waterfront alongside the existing Singapore Indoor Stadium, an indoor aquatic centre, a multi-purpose arena, a water sports venue for dragon boat rowing and kayaking, plus loads of commercial space. A top-rate sports, entertainment and recreation hub where Singapore will stage various international events.

But repeated delays in getting the Sports Hub off the ground - indeed, off the drawing board - has not only cost Singapore its turn to host the 2013 Southeast Asian Games, it has also raised questions about the viability and wisdom of the PPP approach for the $1.9 billion mega-project.

PPP - or public-private partnership - is an alternative means of procurement or sourcing for the government. Instead of engaging the private sector merely to construct facilities or supply equipment, it gets the private sector into the driving seat, from conception, for the turnkey project. A leading role by the private sector, it’s believed, will result in greater innovation across key stages of the project - from design and specification to financing, construction and management.

Well established

‘Singapore should approach PPPs as a regional business. Develop Singapore as a hub for infrastructure financing, for instance. ‘By doing that, we essentially create a pipeline of projects; so the region is our playing field.’

- R Satyanarayan,
executive director and head of corporate finance at KPMG Singapore

The public sector will typically still own and operate the facilities, or engage separate firms to do so to deliver the services to the public. PPP is also known as private finance initiative (PFI) in the United Kingdom, where the concept was born in the early 1990s and where, as of September this year, some 570 PFI infrastructure projects are in operation. PPPs are also well established in Australia.

In the case of the Sports Hub here, the Singapore Sports Hub Consortium led by Dragages Singapore Pte Ltd beat two other contenders to win the bid in January last year to design, finance, build, operate and run a calendar of programmes and events in what would be the Republic’s first fully integrated sports, entertainment and lifestyle hub, for a period of 25 years.

When the facilities are up and running - originally scheduled for end-2011 - the Singapore government will, in exchange for the contracted services, pay the consortium a pre-agreed sum every year for 25 years.

The project, unfortunately, ran into a steep rise in construction costs right from the start. Add to that the global financial crisis from October last year that more than threw a spanner in the works, scuttling all efforts to raise funds for the project. As a result, the completion date for the Sports Hub has been repeatedly pushed back - from end-2011 to end-2012, now to 2013 or early-2014.

Last month, the consortium announced that it was going again to the market to raise financing, and expected to receive offers before year-end. In a statement shortly after, the Singapore government noted that liquidity was gradually returning to the market and banks have started to extend long-term loans again.

‘We have chosen to continue with the PPP model not because the government is short of funds, but because we believe in the benefits that a PPP arrangement can bring,’ it said.

As the Ministry of Finance says on its website, the government believes that PPP offers a win-win deal for all parties: better business opportunities for the private sector and, for the public sector, better value for money in the delivery of public services by reaping efficiency gains and enterprise innovation.

Specifically in the case of the Sports Hub, the government has chosen a PPP approach as having the same consortium undertake all functions will help to optimise life-cycle costs and operations efficiency, it says.

‘For example, the consortium will design and build the facilities in a way that enables efficient programming while keeping operating costs as low as possible.’

The consortium is also spurred to complete construction early, as it will start getting paid only when the facilities are built and available.

The Sports Hub - when completed - will be the world’s first PPP sports infrastructure project, as well as Singapore’s biggest and flagship PPP venture, if hardly its first. Since January 2003, the public sector here has awarded eight PPP jobs, with the Public Utilities Board pioneering with the first two projects: a desalination plant designed, built and operated by Hyflux Ltd, and the Ulu Pandan NEWater plant by Keppel Integrated Engineering Ltd.

Business opportunities

The government sees in PPPs new business opportunities for firms to develop multi-disciplinary skills and form consortiums. Expertise would also develop in areas such as life-cycle costing, integrated design and construction methods to meet future needs in service delivery, operation and maintenance of the facilities, and risk management. Such skills and expertise will also come in handy when firms venture overseas, the government points out.

A 2007 study by Allen Consulting comparing traditional procurement and PPP delivery in Australia concluded that PPPs provide superior performance in both cost and time, and that the PPP advantage increases, in absolute terms, with the size and complexity of projects.

The study also found, going by the availability of public data for its analysis, PPP ventures to be ‘far more transparent’ than traditional projects.

A more recent October 2009 paper by UK’s National Audit Office that looked at the impact of more than 100 private finance projects across the public sector is not as acquiescent. ‘Our view is that private finance can deliver benefits, but it is not suitable at any price or in every circumstance,’ it says.

In any case, despite the stall in the Sports Hub, PPP consultants say that there is good scope to develop the concept here, though it has to be refined in the Singapore context. Specifically, for PPPs to thrive here, there has to be a comprehensive PPP framework and a strong pipeline of projects, say R Satyanarayan, executive director and head of corporate finance at KPMG Singapore, and David Ng, director of global infrastructure and projects at KPMG.

‘Where Singapore has an advantage, which it needs to capitalise on, is its strong rule of law, which is central to the development of a quality PPP environment,’ says Mr Satya, noting that several Asian countries are pressing ahead with infrastructure PPPs in one form or another.

‘Roads are the biggest opportunity staring the region in the face . . . globally, roads are probably one of the most successful PPP sectors,’ he says. ‘But Singapore’s road system is quite good; we have reasonably good quality infrastructure. Where do you build the next PPP road? We are hitting the limits in terms of what new road projects we can get.’

Or hospitals, for that matter. While Mr Ng would like to see Singapore roll out PPPs in social infrastructure - ‘relatively simple’ projects such as hospitals, schools and student hostels are ‘one of the easiest PPP projects to get up and running, and usually the projects that deliver the government best value for money proposition’ - there is the question of just how many more hospitals are there to build in Singapore.

Dealflow is crucial for PPPs as it is very costly to mount a bid.

Says Mr Ng: ‘The reason why bidders want to see a pipeline is that if you get a one-in-two or one-in-three chances of winning, you’d like to see that eventually, there will be a chance with some project down the track.’

Mr Satya says that Singapore should approach PPPs as a regional business. Develop Singapore as a hub for infrastructure financing, for instance.

‘By doing that, we essentially create a pipeline of projects; so the region is our playing field,’ he says.

‘The governments in the region need financing for their infrastructure. We act as a conduit where we help capital formation because we’re a great place where capital pools, and then, in the countries, if the regulatory environment is right, there are good projects and good sponsors, these all come together with the capital flowing out of here to make infrastructure projects happen. This pipeline then makes it more viable for big players to set up regional hubs in Singapore.’

The second strategy, Mr Satya says, is to go for sectors with critical mass.

‘So, for example, water has been a great sector (for PPPs). Identify sectors where Singapore can itself be almost like a deal generator and centre of excellence.’

Apart from a dealflow, the other key issue, in Mr Ng’s view, is a comprehensive PPP framework.

PPP framework

‘So that the private sector knows where it stands when it comes to PPP - (they want to) know how the government selects projects deemed to be suitable for PPPs; know how the government is going to tender out these projects, the processes involved; and what the contracts would eventually look like. Also, knowing what the government’s position is on various allocated risks, and also making sure that the bidding process is kept within a specified best practice timeframe.’

There needs to be a bit more transparency and accountability in adhering to a timeframe so that the private sector isn’t left waiting and wondering on the side about the status of their bids, Mr Ng says.

Compared with traditional government projects, PPP jobs have greater transparency and accountability, and spur decisions geared to the long-term. ‘The question is to apply it to projects that are easier to implement, where you can show clear benefits in terms of delivery, and where the costs of not doing it in government from a social and political point of view are not very high,’ says Mr Satya.

‘I think the jury will be out for a long time, because these are long-term projects. The value for money argument can only be proven when the project is finished. Till then, it’s a bit of a leap of faith. But, from a philosophical point of view, from the fact that it provides the government with a great way of harnessing private sector initiative, we must continue to embrace it in appropriate areas.’

Source : Business Times - 31 December 2009

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Confirmed list for industrial land returns

Confirmed list for industrial land returns

Considerable interest expected in two sites on H1 list; MTI to also replenish reserve list which will have one new site and seven brought over from 2009
By EMILYN YAP

(SINGAPORE) The government will bring back the confirmed list for industrial land sales in H1 next year, providing further evidence of an economy on the mend.

 
Market watchers have welcomed the move and expect to see considerable interest in sites on the upcoming list.

The Ministry of Trade and Industry (MTI) said yesterday that it will reinstate the confirmed list and replenish the reserve list ‘in view of the improved economic conditions, and to continue to meet demand for industrial land’.

The confirmed list will comprise two sites. One is a new 60-year leasehold parcel in Ubi Road 1, with a gross plot ratio of 2.5 and zoned for Business 1 development.

Details of this site could be released in June next year.

The other site, transferred from the H2 2009 reserve list, is in Tampines Industrial Ave 4. Details on the 30-year leasehold parcel could be out in March.

MTI launches sites on the confirmed list for tender based on a schedule. It suspended this arrangement for the whole of 2009 as the economy tanked and put a dampener on manufacturing.

The industrial property market also softened, with rents sliding and vacancies rising.

The Urban Redevelopment Authority’s industrial space rental index lost 8.5 points between Q1 and Q3 this year.

Demand for state industrial land started showing up some time in May. Three sites on the reserve list have been triggered for sale this year and developers competed intensely for them, reflecting a shift in sentiment.

The keen bidding got some market observers wondering if the confirmed list would make a comeback in H1 next year - which it will.

Knight Frank’s head of industrial business space Lim Kien Kim said that with the improving economic outlook, space requirement expectations will rise.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that there is a need ‘to prepare for medium-term demand’, as plots released next year will probably not be ready for occupation until after 2011.

Unlike sites on the confirmed list, those on the reserve list are put up for sale only if interested parties submit applications and undertake to bid a minimum amount acceptable to the government.

The upcoming reserve list will have eight sites. There is a new one at Pioneer Road North and Soon Lee Road, which has a 30-year lease and could be made available in May next year.

There are also seven others carried over from the H2 2009 reserve list, spread across areas such as Woodlands, Kaki Bukit and Yishun.

Together, the 10 sites amount to 21.85 hectares.

Market watchers believe that there will be demand for sites on the confirmed list, especially the one in Tampines Industrial Ave 4. Tampines is a growing industrial area and has attracted high value-added industries, said Mr Lim.

Colliers International director (Industrial) Tan Boon Leong notes that the parcels on the confirmed list happen to be two of the largest in the land sales programme - the Tampines site is 5 ha and the Ubi site 3.39 ha.

He suggests that the government could be testing the market’s reaction to large sites, given the strong interest that developers have shown in state industrial land in the past few months.

 
Source : Business Times - 31 December 2009

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