Snag a Sentosa Condo for 40% Off? Should You Consider It!
TLDR The Residences at W Singapore Sentosa Cove has slashed prices by over 40%, but there are important details to...
Read More
TLDR
The Government Land Sales (GLS) program in Singapore is critical for developers to obtain development land, with sites released biannually. The Urban Redevelopment Authority (URA) manages non-industrial land sales, while the Ministry of Trade and Industry (MTI) oversees industrial sites. GLS sites are categorized into confirmed and reserve lists, with confirmed sites available on specific dates and reserve sites requiring developer interest to trigger tender. Developers bid on these sites, and the highest bidder typically wins, provided they meet or exceed the reserve price, which is 85% of the site’s market value. White sites allow for mixed-use developments, with some requiring a two-envelope tender process. The GLS program influences property supply and market prices, significantly impacting neighborhoods and real estate investments.
Recently, the government land sales (GLS) program has garnered attention as developers have become more cautious in their bids due to weak market conditions. In February, the Urban Redevelopment Authority (URA) revealed that they would not proceed with awarding the Marina Gardens Crescent GLS site, as the only bid of $770.46 million ($984 per square foot per plot ratio) was considered insufficient. Last month, the tender for the Upper Thomson Road (Parcel A) GLS site concluded without receiving any bids. Furthermore, on June 25, URA announced the GLS program for the second half of 2024.
How does it work?
The GLS programmes are announced biannually, at the end of June and December. The sites included in these announcements will be available for tender over the subsequent six months. The Urban Redevelopment Authority (URA) will release the list for non-industrial sites, while the Ministry of Trade and Industry (MTI) will handle the announcement for industrial sites on their respective websites.
URA serves as the sales agent for most of the GLS sites. In contrast, the Housing and Development Board (HDB) typically manages land tenders for executive condominiums, and JTC takes charge of industrial land tenders. For additional information regarding GLS sites, interested parties can refer to the websites of the relevant government authorities. Some details on each GLS site are also accessible through EdgeProp’s LandLens.
When a site is open for tender, developers interested in bidding can submit their proposals to the appropriate government agency before the specified closing date. Developers generally have several months to prepare and submit their bids. On the tender closing date, all bids will be gathered and opened by the government body, which will also publish a list of all bidders along with their bid amounts (unless it is a price and concept revenue tender) on their websites.
The awarding of a site will be announced on the relevant government body’s website, usually about a week after the tender closes. Typically, the site is awarded to the bidder who provides the highest bid price.
Difference between confirmed and reserve lists
Each GLS program features two distinct lists: the confirmed list and the reserve list. The sites included in the confirmed list are set to be available for tender on the estimated launch date indicated.
Conversely, the sites on the reserve list will only be opened for tender if a developer submits an application to the relevant government agency. The developer’s proposed minimum bid price will be assessed against the site’s reserve price. Should the government agency find the proposed minimum price acceptable, they will publish the minimum bid price and announce the site’s availability for tender on their website. The identity of the developer responsible for triggering this process remains confidential.
As a result, the sites on the confirmed list can be regarded as certain potential supply. Additionally, the approximate launch date for future developments on these sites can be predicted based on their tender launch date. In contrast, sites on the reserve list carry more uncertainty due to the lack of a definite tender launch date.
What is reserve price?
The reserve price represents the lowest acceptable price for each GLS site. This price is set at 85% of the estimated market value for each location. The market value is assessed by the chief valuer’s office, which considers factors such as the intended land use, specific site conditions, and recent relevant land sales, including transactions involving completed buildings.
For instance, if the chief valuer’s office establishes the market value of a GLS site at $800 million, the reserve price would be $680 million (which is 85% of $800 million). Consequently, if the highest bid for the site falls short of $680 million, the site may not be granted. It’s important to note that the reserve price for each site remains undisclosed to both developers and the public.
What is a white site?
Every GLS site will have a designated land use specified in the tender documents. While a variety of sites are offered for tender through the GLS programme, residential parcels typically make up the majority of those available. The tender closings for residential sites are also the most scrutinized. The upcoming tender closing for residential GLS sites is scheduled for later this month.
Some GLS sites are categorized as white sites, allowing the successful bidder to create a mixed-use development with complementary functions on the land parcel. Permitted uses for these sites include residential units, offices, retail shops, hotels, serviced apartments, and entertainment facilities.
The latest GLS programme features two white sites: Marina Gardens Crescent (refer to Map 1) and Woodlands Avenue 2. Since these sites are on the reserve list, they will only be launched for tender if triggered.
As previously mentioned, the Marina Gardens Crescent site was offered for tender last year but did not receive an award. The Woodlands Avenue 2 site is a new addition to the GLS programme, permitting both residential and commercial uses.
Certain white sites are tendered using a concept and price revenue tender approach, often referred to as a two-envelope tender. In this method, developers must submit their concept proposal and tender price separately. The government agency evaluates all concept proposals before shortlisting those that meet its criteria. The shortlisted proposals are then assessed based on their tender prices. This process ensures that the successful bidder’s concept aligns with the government’s vision for the site.
A recent example of a GLS site tender utilizing the two-envelope system is the Jurong Lake District GLS site (see Map 2). The tender for this site closed in March, receiving two bids from the same consortium of developers. As of this writing, the site has not yet been awarded. Concept and price revenue tenders usually require more time to finalize due to the in-depth evaluation of the developers’ concept proposals.
The importance of GLS sites
In Singapore, developers typically acquire development land through two primary methods: en-bloc sales and the Government Land Sales (GLS) programme. This allows the government to regulate the availability of development land by modifying the number of GLS sites offered for tender, which in turn influences the quantity of new properties that can be put on the market.
Astute investors should closely analyze the locations of GLS sites since the government often releases more sites in regions where it aims to promote development. For instance, a site in Media Circle was made available for tender in May, designated for long-stay serviced apartments, with the tender closing in September. Furthermore, two additional residential sites along Media Circle are included in the confirmed list for the second half of 2024 GLS programme, both set to be launched for tender in November. The timing of these three GLS site launches aligns with government objectives to increase residential developments near one-north.
A neighborhood can undergo significant changes if several GLS sites in that area are successfully awarded. Existing properties nearby can benefit from this transformation, potentially leading to a rise in their prices. A notable example is the awarding of six GLS sites close to Lentor MRT Station, which has attracted greater interest to the neighborhood and District 26.
Among these six awarded GLS sites, Lentor Modern was the first condominium to be launched for sale in September 2022 (see Map 3). An analysis of price trends in District 26 shows a remarkable 61.5% year-on-year increase in the average price of new 99-year leasehold condos in 2022. Additionally, the average resale price of leasehold condos also surpassed the $1,000 per square foot threshold for the first time during that same year.
Since 2022, the average price of new leasehold condos in District 26 has risen by 2.4% to reach $2,182 per square foot. Conversely, the average resale price of these condos surged by 25%, reaching $1,252 per square foot during the same period.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
Top 5 Dim Sum Restaurants in Singapore
Dim sum, a popular culinary delight that originated from China, has made its way into the hearts and taste buds...
Read More
Exciting News: Affordable Housing in Singapore by 2024?
TLDR The real estate market in Singapore is experiencing shifts in housing supply and demand, influenced by factors like mortgage...
Read More
Strategies for Overcoming ABSD and Acquiring Multiple Properties in 2023 (Revised)
TLDR When it comes to navigating the Additional Buyers Stamp Duty (ABSD) in Singapore, there are legal strategies available to...
Read More
Top 5 Secrets : Foreign Investors Are Rarely Told About Singapore’s Real Estate Market
Singapore's real estate market has been a popular choice for foreign investors due to its stable economy, strategic location, and...
Read More
3 Trends For New Launch Properties In 2023
TLDR When considering buying or selling a property in Singapore, it's crucial to understand the market dynamics and key metrics....
Read More
Ready To Make The Jump From HDB To Condo? This Guide Has All The Answers!
TLDR When upgrading from an HDB flat to a condo, consider factors like location proximity, amenities, and regulations. Decide whether...
Read More
When Is The Best Time To Buy A New Launch?
TLDR When it comes to new property launches, timing is crucial. Early buyers often secure the best prices due to...
Read More
I Decided to Pay the Additional Buyer’s Stamp Duty to Purchase a Condominium While Retaining My HDB: My Reasons
TLDR Despite a 20% Additional Buyer’s Stamp Duty (ABSD) for second properties in Singapore, Yang chose to hold onto his...
Read More
Get Into Core Central Region Before Big Price Adjustments
TLDR Jayson Ang discusses the essential factors to consider when seeking a property for investment. By analyzing the safe entry...
Read More
Don’t Miss Out: Take Control of Your Life in Your 30s and 40s
TLDR The stages of wealth management vary from ages 30 to 80, with different focuses and considerations at each stage:...
Read More
Discover Affordable Executive Condos in 2024 Starting at $560,000
TLDR The Executive Condos (ECs) offer affordable options compared to private properties in Singapore. Despite price variations, most ECs remain...
Read More
Singapore’s Urban Landscape Transformation: 5 Key Things You Need to Know
Singapore's urban landscape has undergone significant changes over the years, with the city constantly evolving to create a sustainable and...
Read More
Top 5 Thai Restaurants in Singapore
Singapore, a melting pot of cultures and cuisines, is a food lover's paradise. Among the myriad of dining options available,...
Read More
5 Tips : How To Choose The Right Property Agent To Help With Your Singapore Property Investment
Choosing the right property agent is crucial to the success of your Singapore property investment. A good agent can provide...
Read More
What’s Needed For Singapore To Lift Those Cooling Measures?
TLDR The blog post discusses the recent relaxation of real estate restrictions in Hong Kong, contrasting with Singapore's stricter regulations....
Read More
Top 5 Factors: Singapore Offer A Stable And Lucrative Investment Opportunity In Real Estate?
Singapore, a small yet economically powerful city-state, has long been recognized as one of the most attractive destinations for real...
Read More
Top 5 Dessert Places in Singapore
Singapore, a melting pot of cultures and culinary delights, is known for its mouth-watering food scene. From hawker centers to...
Read More
Top 5 : Best Quirky Museums in Singapore
Singapore, a vibrant and diverse city-state, is known for its rich history, cultural heritage, and modern attractions. While the city...
Read More
