CBRE sees sustained strong demand for residential, office properties

CBRE Research said Singapore government is looking into placing more residential, commercial sites.

Residential
The continued robust demand for private residential homes has resulted in strong demand for residential land for development in the past nine months or so. A total of 15 residential, residential/commercial and executive condominium sites from the government land sales programme have been sold since August 2009, accounting for some $2.7 billion, Li Hiao Ho, Executive Director, CBRE Research said in a CBRE report.

Due to the ongoing demand for private homes and the appetite for land from developers, the government has placed 20 new residential or residential/commercial sites on the GLS programme 2H2010. There are 10 new residential sites and one new residential/commercial site on the confirmed list, and eight new residential sites and one new residential/commercial site on the reserve list. Altogether, the existing sites and the new sites can potentially yield some 13,905 new homes.

With the good response in recent GLS tenders for two executive condominium sites in March 2010, four new executive condominium sites have been placed on the confirmed list.

As is the case with GLS tenders in the last nine months, the sites in close proximity to MRT stations will prove to be popular and are likely to be hotly contested, as are the ones that are situated closer to the city. For example, in the recent tender exercise at Simei Street 3, there were 18 bidders in total. With such an overwhelming amount of developer interest, the 27 residential sites and four mixed-use sites where private housing for 2H2010 can be built would be well received. Nonetheless, there is a good spread of residential sites in a variety of locations ranging from mid-size (240 to 500 units) to large sizes that can accommodate more than 500 units.

All in, the GLS programme for residential sites will be active throughout 2010.

Office
More office parcels will be released by the government to cater to the needs of the business community. Other than a sole parcel in the Tanjong Pagar micro-market, two other new major commercial sites at Jurong East and Paya Lebar were launched, initiating the government’s vision of creating new decentralised commercial hubs in the eastern and western parts of the island.

The prime commercial and residential site at Bedok Central, as well as a parcel at Punggol, were also moved up to the confirmed list. This should help hasten the revitalization of these areas.

Most of the upcoming office pipeline supply would be completed between 2010 to 2012. The government should perhaps look into placing more commercial sites in the CBD on the confirmed list in the next six to twelve months. This is to ensure a steady stream of office space for the business and financial community from 2013 onwards.